I appreciate all the feedback. I think its natural to view an animal companion as something akin to a wizard's familiar, or to a faithful pet, or even as a friend. But I'm not sure that the rules support that view. I'm still feeling out Drogo, as well as the rules in general.
Just because the animal companion is easily replaced, doesn't mean he's not meaningful to the druid. Drogo is a practical guy, and a man (er...hobbit) with a mission, whatever that mission happens to be. (Currently trying to save the Mellorn from this evil down the hole.) I'm going to assume if he were to release Rex from service, Rex would be fine. That he would return from whence he came, to a place probably safer and happier than the dangerous life of the riding dog mount of an adventurer. As such, Drogo will be willing to replace him if it serves the greater purpose. It might be a sad parting, but adventurers leave loved ones behind all the time.
He will treat his life as valuable, as I would think if he dies, he dies. And he's more than a dog. More intelligent, and one who has served Drogo faithfully for a long time.
With that more clear in my mind (& in yours), I'm ready to continue!