The Hobbit was a great success on its publication. Children loved it and sales were robust. The publisher asked Tolkien for more about hobbits. Tolkien’s response was to send an early draft of the Silmarillion.
For anyone who hasn’t read both books, here is the opening line of the first one.
“In a hole in the ground lived a hobbit.”
Here is one of the opening lines of the Silmarillion. (Its structure is a bit diffuse making it hard to tell exactly where the actual narrative begins.)
“In the beginning was Eru, who in Arda is known as Illuvatar”.
It doesn't really grab you and pull you into the story the way the Hobbit does. I think the publishers can be forgiven for deciding not to go with the Silmarillion.
I suspect that the public probably were not ready yet for Tolkien’s great work explaining his cosmology in considerable detail. More detail than most of us realised we wanted.
While many people, including me, have read the Silmarillion and enjoyed the process - indeed consider it a work of genius - nonetheless it isn’t a book that leaves you desperate for more the way the Hobbit and Lord of the Rings do. And the publishers were clear enough. They wanted a book with more about hobbits.
Had the publishers put out the Silmarillion many of the references Tolkien makes to the historical background of the world of the Hobbit in the chapter on Rivendell would have made sense, even if the commercial calculations didn’t. Elrond is introduced as half elf descended from both elves and Northern heroes. The effect is to once again give the book that depth that is so characteristic of Tolkien’s writings. It always strikes me that if we knew Tolkien only by this one work and on other, we would probably be impressed at the way that he uses this literary trick to give the impression that the story in hand is just one drawn from a large body of tales making up the history of his imaginary world.
But thanks to the success of Lord of the Rings, we now know that that is exactly what it is: one small snippet from a much bigger picture. The elves of the Silmarillion bear very little resemblance to the elves of folklore, and these are the elves that Bilbo and the dwarfs meet in Rivendell. There are several references to the epic back story that nobody who read the Hobbit up until 1977 had any chance of getting. But there are some features of the elves as portrayed in the Hobbit that are a bit closer to conventional everyday fairies than the rather serious creatures in Tolkien’s other writings.
For a start they are bit more light hearted, with jokey songs and good natured mockery of the dwarfs’ beards. I should just point out that Tolkien treats elves and fairies as pseudonyms - but in quite subtle way. For example, you never hear about an elf that is right in front of you being referred to as a fairy. The fairy reference is almost always indirect. This adds a layer of authenticity to them by making an indirect connection to everyday fairies. People who call elves fairies haven't actually seen them. So their ideas about them are a lot vaguer. This gives the elves a bit of mystery and makes them a bit more like the fairies of everyday folklore and less like the noble but tragic beings of the Lord of the Rings and Silmarillion.
Another way the elves of the Hobbit are a bit more traditional is that they keen on staying hidden. Rivendell is hard to spot until you get right up close to it, and the elves themselves are a bit more elusive than later ones. Folklore fairies have their own ecological niche. They live at the bottom of the garden out of sight. You don't find them on the lawn. That is the realm of the garden gnome.
Elrond himself is a half elf - which is one of the things that early readers like myself had a long wait for an explanation. There is simply no indication of any kind as to what the other half is. We meet Elrond in the text before we meet any actual men so the truth is far from obvious.
Whatever his breeding, he is a substantial figure. He has great ancient wisdom which is deployed to explain their treasure map to the dwarfs. It turns out that you have to hold it up to the Moon to read it properly. And not just any Moon, a full Moon. The chances of this occurring just when the dwarfs met up with Elrond were not high, but nonetheless that is what happened. The information that Elrond revealed was crucial to the success of the project, so it really was a lucky break. This kind of happy coincidence is to occur a lot more throughout the book. This could be interpreted as the operation of divine providence. God is setting up the plot in his own way to reveal His truth and stress that nobody can achieve anything without His help.
But I don't think this is the correct interpretation. I think the point is that the dwarfs are creating their own luck by their action. They had obviously set out without mission critical data. In particular they were unaware that there was a secret entrance to the mountain guarded by the dragon. The lesson is that if you need to get something done, just get started. The details will sort themselves out.
The dwarfs leave Rivendell in a much stronger position to get back their long lost treasure. But before we follow them, a quick note about Rivendell itself.
The name Rivendell is suggestive of its geography. It is a dell or valley riven or scoured from the landscape. It sounds very much like the kind of place you would find in the north of England, both in the sense that that is where you find that kind of place and where you find names like that. But in fact it was based on somewhere in Switzerland. Namely Lauterbrunnental, a valley Tolkien visited on holiday as a young man. This doesn't really help understand or interpret the book, but it is an interesting titbit. Tolkien must have let his imagination free reign quite a bit. I wonder how many other bits of scenery from his imaginary world have real world equivalents. I expect it is quite a lot of them.
You can see pictures here.
http://scv.bu.edu/~aarondf/Rivimages/realriv.html