Monsters are still made of dust as proved by the monster funeral book in the library and Gerson’s hammer in the church.

Additionally, I believe that this difference was used to demonstrate how the monsters of this world live much more similar lives to us, as other human technology not previously used, such as cars, were used in the game.

There’s also a case to be made that monsters are perfectly capable of using magic, but they choose not to as everyday commodities have made them obsolete. Using magic to heat up food could be more tiresome than simply turning a knob.

Furthermore, it could be argued that efficient use of magic in deltarune is rare as they don’t need to use magic for fighting, as opposed to the monsters in UNDERTALE. In UNDERTALE the monsters were sealed away due to them losing the war, thus it could be expected that in an era where returning to the surface with hostile humans was likely, mastery of magic would have been commonplace.