Interesting points. Let me see if I can make some sense of this.
First, and most important, one of Tolkien's major running themes is that most good nations and protagonists tend to live isolated from one another - possibly one of the reasons they got their asses kicked so much. This is one of the reasons why the Palantiri are so important, especially to men.
Elves - The elves of the Gray Havens and Rivendell would all certainly know of hobbits, but historically took great pains to avoid them. It was therefore a rarity for elven-hobbit interaction. Galadriel and many of the elves of Lorien would certainly know about hobbits as well, but had never seen one until Frodo & Co. arrived. As for the elves of Mirkwood, who were isolated even from other elven nations, probably only heard of hobbits for the first time when Bilbo appeared to Thranduil with the Arkenstone - not much time to spread the news even if they did keep in touch with the south!
Dwarves - At the time of the WR, the dwarves actually seem to be the most well travelled of the races, constantly going back and forth between the Blue Mountains and Erebor. As a result they tended to be less baffled by the Hobbits.
Ents - They basically kept to themselves. Even Galadriel seems to have forgotten about them. Their only interaction seems to have been with the wizards. Gandalf probably never brought it up in conversation.
Men - This is probably the most difficult point. The men of Arnor (and later the Dunedain of the north) certainly knew about and interacted with Hobbits regularly. But for some reason, even at their height, Arnor and Gondor interracted relatively infrequently, and almost not at all by the time of the War against Angmar. Furthermore, the Hobbits didn't even begin to arrive until around this time. Once Arnor was destroyed, Gondor basically had no contact with the north and the Hobbits became a legend in the south. Rohan, similarly, had no contact with the north once they departed.
If this still isn't convincing, consider Earth's history. How many ethnic groups, well known to each other in ancient times, became mutual legends during Earth's dark ages? Romans regularly traded with the both India and China, both by land and by sea. By the 6th century many in the west no longer believed these lands existed, and they were not visited again for many centuries.
Just some thoughts.
- Cirdan / Maglor68
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