Quotations about hobbits from Tolkien's private letters.
Letter #17
I cannot think of anything more to say about hobbits. Mr Baggins seems to have exhibited so fully both the Took and the Baggins side of their nature.
Letter #131 footnote
The Hobbits are, of course, really meant to be a branch of the specifically human race (not Elves or Dwarves) – hence the two kinds can dwell together (as at Bree), and are called just the Big Folk and Little Folk. They are entirely without non-human powers, but are represented as being more in touch with 'nature' (the soil and other living things, plants and animals), and abnormally, for humans, free from ambition or greed of wealth. They are made small (little more than half human stature, but dwindling as the years pass) partly to exhibit the pettiness of man, plain unimaginative parochial man – though not with either the smallness or the savageness of Swift, and mostly to show up, in creatures of very small physical power, the amazing and unexpected heroism of ordinary men 'at a pinch'.
Letter #178
[The Shire] is in fact more or less a Warwickshire village of about the period of the Diamond Jubilee [1897]
Letter #180
The hobbits had been welcomed. I loved them myself, since I love the vulgar and simple as dearly as the noble, and nothing moves my heart (beyond all the passions and heartbreaks of the world) so much as 'ennoblement' (from the Ugly Duckling to Frodo).
Letter #246
He [Sam Gamgee] is a more representative hobbit than any others that we have to see much of; and he has consequently a stronger ingredient of that quality which even some hobbits found at times hard to bear: a vulgarity – by which I do not mean a mere 'down-to-earthiness' – a mental myopia which is proud of itself, a smugness (in varying degrees) and cocksureness, and a readiness to measure and sum up all things from a limited experience, largely enshrined in sententious traditional 'wisdom'.
Letter #281
Hobbits were a breed of which the chief physical mark was their stature; and the chief characteristic of their temper was the almost total eradication of any dormant 'spark', only about one per mil had any trace of it. Bilbo was specially selected by the authority and insight of Gandalf as abnormal: he had a good share of hobbit virtues: shrewd sense, generosity, patience and fortitude, and also a strong 'spark' yet unkindled.