There are three groups of Halflings that settled in The Shire at different times. The Fallohides are tall, have good relations with Elves, and are more adventurous than other halflings. By Bilbo and Frodos time Hobbits have homogenized, but the Baggins and other 'upper class' Hobbits still share Fallohide characteristics. Fallohides were sort of the 'noble' halflings, and Bilbo and Frodo are Fallohides. I don't remember Gandalf having any canon links to halflings before The Shire (disregarding Rings of Power) but it would have had to have been well before even the founding of The Shire, because the Fallohides already had an established identity. Anyway I like it. Gandalfs great work culminating in his line producing Frodo, the Hobbit hero who destroyed the ring and sailed west with his own greatx57 grandfather.