**Question about hobbits' unfamiliarity**

[Rhudladion]

Consider this:
The Shire is positioned very near a major crossroads (The Greenway & The East Road). Not far from that point, Bree exists, which is populated by both men and hobbits. There seems to be much evidence of traffic throughout all these areas by many of the peoples of ME.
Sooooo...why, throughout the LOTR, do certain characters of different races react with amazement upon seeing a hobbit for the first time? They say things like, "I've heard about your kind in legend", or they are amazed at their size. This does not make much sense to my friend and I, because it seems that with the traffic and all, the hobbits would be more prevailent in the conversations of men, dwarves, elves, wizards, etc. Why is everyone amazed that they actually exist? It's not like they live on an island in the Sea.

Anyone have any ideas???