In my homebrew world there are two ethnicities for each of the four main demihuman races.
High Elves: Conglomeration of the high, grey, moon, sun, rivendale type, they practice arcane magic and live in crystal spire cities built within the forest. Gets a bonus to dex and int, negative to con
Wood Elves: The wood, wild, lothlorien type. Nature loving although not xenophobic, lives in tree top cities heavily warded against fire. May still practice arcane magic but much more inclined to be druids and rangers. Bonus to dex and wis, negative to con.
Hill Dwarves: While still good crafters these guys are more the traders and arms dealers of dwarven crafts and have much more interaction with the outside world, makes their home in the hilly areas at the base of mountains and their cities usually have both above ground and underground sections. Gets a bonus to con and wis, negative to dex.
Mountain Dwarves: More reclusive than their hill dwarf cousins, expert crafters of weapons, armor, and basically anything made of stone or metal. They dwell inside the mountains, their cities being at least half a days march from their (usually hidden) tunnel entrances. Gets a bonus to str and con, negatives to dex and cha.
City Halflings: These are the skinny, athletic, light fingered roguish types, generally preferring to dwell in human cities where they can enjoy the hustle and bustle of city life and all the creature comforts it entails. Bonus to dex and cha, negative to str
Shire Halflings: Hobbits through and through, complete with big bellies and hairy no-shoe'd feet. Likes to eat, drink, and smoke weed....err "pipeweed". Lives in green, slightly hilly plains in their hobbit holes, could be a druid or ranger as easily as a rogue. Bonus to dex and wis, negative to str.
Tinker Gnome: Less Dragonlance-y, more FR Isle of Lantan worshippers of Gond type. A healthy love of crafting and all things mechanical (favorite weapon: repeating crossbow, preferably with scope attachment). They either live in human cities, plying their crafts or in clockwork cities of their own people. Bonus to con and int, negative to str.
Garden Gnomes: These guys find you excellent deals on travel trips and vacations, also they have a strange fetish for large pointed hats.
They love nature almost as much as wood elves, albeit the serene, peaceful version, preferring carefully tended gardens that they like to stand in and admire. They are just generally cheery and good folk. Bonus to con and cha, negative to str.
Each of the above tropes (and probably more, but I favor these) has a place in the D&D universe, there is no reason to shut out any one type of (in this case) halfling from getting its D&D lovin.