Our Bilbo, when he started his adventures, was regarded as something of a fool. Today he earns the respected reputation that he seems to have kept for the rest of his life:
The Elvenking looked at Bilbo with a new wonder. "Bilbo Baggins!" he said. "You are more worthy to wear the armour of elf-princes than many that have looked more comely in it."
High praise indeed!--I think.
Mixed compliments aside, the Elvenking's praise for Mr. Baggins' character is in response to new traits that Bilbo exhibits in the events of this night: ingenuity, wisdom, courage, and generosity. He devises a diplomatic plan, gives Bombur the slip, makes his way to the 'enemy' camp, gives up the Arkenstone (not without some longing), with some suggestions as how it could be best utilized--and then returns to the dwarves, knowing he'll be facing the music when he has been found out.
Bilbo's language these days reflects his newfound dignity: he alternates between sounding like Gandalf and sounding like some little hobbit lawyer. At the end of today's escapade, however, after he sneaks back to the Lonely Mountain, we find what really moves Bilbo's heart, and it is not precious gems: after he drifts off to sleep, Our Author tells us that he dreams of bacon and eggs.