(The following is another insight I have recently developed in conversation with my son Billy - indeed Billy should get most of the credit for this idea since the main conceptual breakthrough was his.)
Do the Hobbits have a special role, or purpose, in the destiny of Middle Earth? Were they just an evolutionary accident, or was the fact of their (apparently) arising during the Third Age of Middle Earth for an important reason?
It is clear that Hobbits - in actual fact - played an essential role in the defeat of Sauron; in some very obvious ways (Bilbo finding the ring, Frodo bearing it to the Cracks of Doom); but also in several essential but non-obvious ways - when Hobbits are overlooked, or their abilities unknown or discounted. But was this role in any sense planned?
What is fascinating about Hobbits is that they represent a departure from the 'usual' idea that the future of Middle Earth is determined by individuals and peoples with special powers. The usual way that the Valar tried to prosecute the war of Morgoth, then Sauron, was through enhancement of either personal, magical or 'technological' power.
A prime example of this is the High Elves - who were super-elves; and another is the Numenoreans - a race of super-men (including the lineage of 'half-elven' who also had divine descent from Melian the Maia). Sending five wizards to work against Sauron in the Third Age was a further instance.
The fatal problem with this super-power strategy was corruption; because so many of the most powerful individuals (and, indeed, races) began Good but became evil. The usual result was the super-powered Good was neutralised or overcome by super-powered corruption onto the side of evil.
This began with the most powerful Vala, Morgoth; then the most powerful elf, Feanor - who also led many of the most powerful elves - Noldor - into evil works; including Celebrimbor who made the Three Elven Rings but without whom the (more powerful) One Ring could not have been made.
There was a whole string of corrupt Dark Numenoreans (surviving as the Corsairs of Umbar), until nearly the whole of the Numenoreans were corrupted. The last and most powerful Numenorean King - Ar-Pharazon - was on the side of evil. And there was a powerful dark Numenorean magician who became the Nazgul Witch King.
Of the Wizards, although Gandalf was a great success, he was substantially negated by the corruption of the originally most powerful wizard - Saruman; and the other three wizards were either almost ineffectual/ neutral (Radagast), and (perhaps, as speculated in Unfinished Tales) the mysterious lost Blue Wizards became grey eminences behind the Sauron-allied Eastern men.
We could say (to adapt Spiderman): With power, goes great desire for more power...
So, we could imagine that the Hobbits were an opposite strategy against Sauron. Instead of enhancing 'power' - where power is seen as the ability to impose one one's will on others, the Hobbits arose. Half the size of men, weaker, less intelligent; their special abilities mainly concerned with quietness and concealment; and their relative immunity to the temptations of power.
In a world where corruption to evil is the plague of all with power; Hobbits seem intrinsically the most resistant of all races to this kind of corruption (Tom Bombadil is one-off, not a race).
Of course, average/ normal Hobbits have all kinds of petty vices such as greed and laziness, narrow materialism, and a negative clannish parochialism of attitude. But their typical lack of desire for power, or to dominate, becomes a special strength in the world of the Third Age.
Consequently, as Anti-Power specialists, Hobbits display an unique resistance to the One Ring - as exemplified even by Gollum (who carried it for hundred of years, and survived); but also (in different and better ways) by the other Ring-bearers Bilbo, Frodo and Sam.
The story makes it clear that (ultimately) the entire hope of Middle earth rested upon these four Hobbits; and only the Gollum-Frodo-Sam trio - with Frodo as the bearer - could have led to the destruction of the One Ring.
So, if we accept that the emergence of Hobbits was 'meant' - and not just a happy accident - who made them happen?
Were they a contribution by one of the Valar - as Aule made dwarves or Yavanna made ents, with Illuvatar secondarily providing the necessary creative life?
We suggest that the most likely; is that Hobbits were a direct, but secret and undeclared, intervention by Illuvatar.
At about the same time as the Valar were yet again trying their usual strategy of supplying power-enhanced individuals - wizards - for the fight against Sauron; perhaps The One, God: Illuvatar quietly made Hobbits.
This would make Hobbits the third-comers among the Children of Illuvatar - coming in the Third Age after first elves, then Men, emerged in the Elder Days. The Hobbits' special role, prepared from the first but only evident at the very end of the Age, was to be the destruction of the One Ring and thereby of Sauron; which we could assume was the main priority of that Third Age, after Isuldur had failed to destroy the Ring at the end of the Second Age.
The covert emergence and existence of Hobbits was, indeed, part of the plan. Very few of the wise and powerful knew or cared anything about Hobbits - which is exactly what enabled them to do their vital job. They were continually - and for Saruman and Sauron fatally - despised, underestimated and overlooked - left-out of all plans and considerations.
Yet again and again this neglect and condescension is exactly what enabled Hobbits to make their decisive interventions - not just the Ring-bearers; but also Merry in slaying the Witch King; or Pippin in accidentally misleading Sauron when seen in the Palantir; or both of them in triggering the awakening and mobilization of the Ents and Huorns.
In conclusion, we suggest that the Hobbits arose in the Third Age of Middle Earth, as part of a new, different and secret plan by Illuvatar - The One - to oppose Sauron and to destroy the One Ring. Therefore, Hobbits ought not to be considered as merely 'small Men', but as a separate and unique creation of God, with a separate and vital - albeit temporary - role in the history of the world.