Tolkien rejected claims of allegory lie "Hobbits are the British".
JRRT was a professor of language and literature. When he said that he "detests allegory in all its form" (I think that's a quote, and in any event is a fairly close paraphrase), he was meaning
allegory in it literal sense: a form of storytelling in which each element and event in the story stands as a proxy for an element or event in some other story which is the "real" story being told. And he denied that LotR is an allegory in that sense.
But he was not making the (absurd) assertion that there is no symbol, metaphor or allusion in his work. It is replete with them.
And one of the obvious ones is that the Hobbits express a certain sort of English self-conception.
@Hriston actually provided us with the relevant quote, not all that far upthread; but it is not necessary. One only needs to read the works.
Considering Frodo is considered young at 50, I do not belive Hobbits were meant to just be humans.
You are mistaking a plot device for something of substance. The age of Hobbits is like the immortality of Elves, or the thousands of years of the Third Age. These are set dressing, no more.
The story tells us that Minas Tirith has existed for longer than the time between
me writing now and Aristotle and his peripatetic students in classical hens, yet has been basically in cultural and technological stasis for that entire time. We can accept that proposition for the purpose of following along with the story, but it is just a trapping, no different from Aragorn being around about 80 years old during the events of the LotR. And no different from Frodo's age.
The reason that Hobbits are relatable is not because readers identify with some strange beings, but because readers identify with human beings, and the Hobbits are quintessentially modern humans.
I mean, Watership Down is ostensibly about rabbits, but its rabbits are presented basically as human also; every now and then the author reminds us that they are not. Likewise Pooh and Piglet and Mole and Rat and other non-human characters in fairy stories and children's tales.
Whether presenting your human protagonists as rabbits or teddy bears or anthropomorphic tortoises or Edwardian fairy-folk is
silly or not is a further question. It works well for children. JRRT pulls it off - although I have known some people who
do think it is silly. Perhaps because of my knowledge of TMNT I find anthropomorphic chelonians a bit hard to take seriously; but I could probably learn to take them seriously if I was exposed to them in a serious context.