The picture is exactly how I imagined Lake-town! Except that I always pictured the barrels to be on the other side of the bridge...
One of my favourite parts is Bilbo's thoughts about the Mountain. Perhaps I like it because I love colourful landscape descriptions, or because Bilbo is getting a sombre streak in his character in addition to the "shiny happy-go-lucky hero who gets everything right because he's lucky" type of personality. I don't know, I just like Bilbo's broodings in this part.
I also like the "legend" that Thror and Thrain will return and gold will flow etc. Because I love legends.
But Tolkien adds a funny bit to this piece of lore:
"But this pleasant legend did not much affect their daily business". I wonder if any of the Lake-town people truly believed in that legend until it actually happened, or if it was more of a children's tale or a fairy tale (for example, I quite believe in Lotr and TH and etc when I'm on the Downs, but in RL it's just a book, maybe true, maybe not, who knows - and who cares? The story's good for telling and it's all that matters). Later on we find out that some youngsters did not even believe in Smaug, so perhaps the legend was something similar. And the Master of Lake-town was pretty doubtful. On the other hand, the guards reacted quite quickly and without disbelief when Thorin announced himself, and the common folk literally flocked to him...
That makes me think...if Smaug did not stick his head out for so many years, he must have been
really hungry.
I think it's rather cute that Bilbo insists that it is the Dwarves' adventure, not his. He doesn't realize it, but it's more his adventure than the Dwarves'
I am curious that the Lake-town dwellers did not once question Bilbo. The LOTR characters always had enough time to wonder about hobbits, no matter how grand their companions were. TH is not LOTR, of course, but it's interesting that Thorin's arrival would wipe everything else from the people's head to that extent. In fact, I think they hardly noticed Bilbo at all!
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One very obvious aspect in this chapter is that of Bilbo's discomfort and unhappiness with their situation. How does that strike you?
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I've always thought it shows that Bilbo's common sense and foresightedness trumps that of the Dwarves. He has the better grasp of the situation.