Well said, radagastly. That section does add to the texture of Middle-earth. That whole section of the books is amongst my favourites, purely because it is so magical - in fact you can keep your Elves, I find the Barrow-Wight, Tom, Goldberry and Old Man Willow more magical than all the Elves put together
Those chapters are just stuffed with references to English folklore and history.
Old Man Willow also foreshadows the Ents, and the Barrow-Wight the army of the dead.
And from a purely narrative point of view, it gives the Hobbits some genuine adventure and peril before they run into Strider. Had they run into him after having a wholly uneventful journey to Bree then I think they would have reacted in a completely different manner.