Direct limits do behave well with respect to quotients. Suppose $A$ is the direct limit of a sequence $(A_n)$ with connecting $*$-homomorphisms $\phi_n: A_n \to A_{n+1}$, and let $I$ be a closed ideal of $A$. Then $I$ pulls back to an ideal $I_n$ of $A_n$ for each $n$, and the connecting maps $\phi_n$ are compatible with the quotients, i.e., they lift to connecting maps $\tilde{\phi}_n: A_n/I_n \to A_{n+1}/I_{n+1}$. Moreover, $A/I$ is then the direct limit of the sequence $(A_n/I_n)$. This is easy because the maps $\tilde{\phi}_n$ have no kernel and hence are isometric, and the whole sequence isometrically embeds in $A/I$.
On the other hand, direct limits do not commute with pullbacks; see this question.