From whatever I have read and the tutorials I have seen, I have seen
them derive the RMS value only considering the first positive half
cycle of the periodic wave. Why is this?
Let's consider a few numbers such as {2,3,5}. Mean of these numbers (aka average) is:
(2+3+5)/3 =10/3
Now consider the average of {2,3,-5}. It would be (2+3+(-5))/3 = 0
Think of a periodic signal (e.g. sin wave) as a sequence of numbers.

If you were to sum these numbers for a half cycle and calculate the mean and it would be a positive number. But if you added these numbers for the full cycle, then it would be exactly zero. For the continuous case, you do an integration instead of a sum. The concept is the same though.
Why don't they consider the second half cycle (which is either
negative or decreasing to zero) while arriving at the RMS formula?
But what if a phenomenon (such as an ac voltage) was useful in both directions and we still wanted to find its effectiveness. Clearly a simple average won't do in the presence of negative quantities. So the points are squared to make them positive, mean is calculated, and then it is squared (and read backwards to give us rms).
rms of {2,3,5} would be Sqrt ( (2)^2 + (3)^2 + (5)^2 /3 ) = Sqrt[38/3]
What about rms of {2,3,-5}: The rms would still be Sqrt[38/3) since the negative quantity would be squared turning it into a positive quantity.
For a sin wave (for example) the following integral would integrate (or sum) from 0 to \$2\pi\$, find the mean by dividing by \$2\pi\$ and then get the square root to get \$\frac {1} {\sqrt {2}}\$:
$$\sqrt{\frac{\int_0^{2 \pi } \sin ^2(x) \, dx}{2 \pi }}$$
You can do this calc this for a half cycle (and divide by \$\pi\$) to get the same result as the two halves are identical, but you can't do it for an asymmetric shaped signal.
Second question, while considering the AC sine voltage , how does it
effectively produce power when you have both positive and negative
half cycles? Won't they cancel each other out?
Think of an AC voltage as a force that vibrates electrons (for instance) in either direction at 50 or 60 Hz (most common values). Energy is transferred through the wire and the electrons in the metal wire pretty much stay in the same place.
How much DC voltage would be required to get the same energy to transfer is going to be the rms value of the ac voltage.