Gandalf didn't create the band of Dwarves, they all decided to go on their own accord. I believe they asked Gandalf for help, though. And that led to the whole business of Gandalf not being able to go with them all the way and thirteen being an unlucky number for the Dwarves. So, to solve their problem, Gandalf suggested Bilbo Baggins go with them.
He probably picked Biblo because the Hobbit seemed to have that spark in him. No other Hobbit would've gone, they just would have shrugged their shoulders or outright laughed at the thought of adventuring. You'll notice that even though Bilbo had a perfect oportunity to not go on the adventure, he ran out his door at ten minutes to eleven to catch up with everyone. Gandalf probably saw in him a sense and a longing for something more than the Shire he had grown up in.
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WWAHD? (What would a Hobbit do?)
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