I guess I just don't get it.
I don't know when things like Innocence, Authenticity, Tranquility, friendship, just plain being comfortable and in harmony with one's self and surroundings became such UNheroic concepts. But clearly, they simply are not anymore for large sections (or generations, at this point) of fantasy players. Clearly is one isn't a moody broody dark misunderstood antihero, or some manganime uber-powered and proportioned mega-man, there's just no point to going on adventures or playing a fantasy RPG.
If you give a halfling bat wings and laser eye-beams, well then they would have a [suitable for acceptance] "niche?" THEN they make sense with the firbolg and tiefling and half-goblin-winged-centaur?
Kobold aren't any more interesting than halflings just by virtue of being small scaly rat-tailed dogmen. Even less so as small mini-draco-reptileans. Gnomes aren't any "better" as a PC option because they have some fey fluff written into their lore for the last few editions.
The game gives you what you need to make, well, any creature suitable/interesting for your games. You just need to use what's there.
In my particular setting/world, I just group up some other critters so Halflings have the same diversity and options as the other "big four" species for PCs. Dwarves have a few "sub-races" that are both cultural and magical differences. Elves, of course, have the whole High-Wood-Drow thing going since the dawn of D&D/fantasy TTRPG time.
SO there are the "normal" pastoral tolkienesque halfling folk. Small. Stealthy. Festive, foodie, fun whimsical guys who love a well-crafted coat and a warm bed.
There are, right there in the 1st Monster Manual, Brownies. The "earthy" fey offshoot Halflings who went to the Land of Faerie eons ago and now can (sometimes intentionally, sometimes not) move back and forth to the material plane setting. Helping out do-gooders...or not just making mischief...with their limited magical powers.
Then, there are the evil underground assassiny shadow-magicky halflings that humans simply call "Dark Creepers" [they have an in-game in-world name as a species other than that, of course]. These were "normal halflings" once. Lured by greed and envy of the wealth and power of other species to the depths of the subterranean world, and enslaved to an evil overlord [a "wizard" or some other power depending on the rumor/legend being told of their origins]. Corrupted and tainted by the callous, dark emanations that pervade all the Underworld. Now they know nothing but darkness and move with/through it with startling ease.
Hill Dwarf - Mountain Dawrf - Grey Dwarf/Duerger, though I use Derro as the evil underdark dwarves in my setting (and Shield Dwarf and Gold Dwarf and Iron Dwarf, and, and, and...)
High Elf- Wood Elf - Dark Elf/Drow (and Sea Elf and Winged Elf and Moon Elf and Copper Elf and and and...)
Pastoral Halfling - Fae Halfling - Shadow/Dark Halfling. (and I basically stop there.)
Does this make them "interesting" or legit as a PC species? Or give them any more "niche" than ten "kinds" (cultures, genetic offshoots, what have you) of elves and six kinds of dwarves? Probably not.
It's good/fun world setting lore, tough. Serves for making fun NPCs and good plot hooks. But the hairfooted jovial venturer -accidental or otherwise- is just as much fun to play, and just as niche in the game world, whether you have fae-magic Brownies and Shadow-Underdark-halflings roaming your world or not, as any dragon-man or half-demon.