Here is a snip of a great article about why we are drawn into such tales:
'The Hobbit' and Virtue
by Joseph Pearce
At its deepest level of meaning, The Hobbit is a pilgrimage of grace in which its protagonist, Bilbo Baggins, becomes grown-up in the most important sense. Throughout the course of his adventure, the hobbit develops the habit of virtue and grows in sanctity, illustrating the priceless truth that we only become wise men (homo sapiens) when we realize that we are pilgrims on a purposeful journey through life (homo viator).
Bilbo’s journey from the homely comfort of the Shire to the uncomfortable lessons learned en route to the Lonely Mountain, in parallel with Frodo’s journey from the Shire to Mount Doom in the Rings trilogy, is a mirror of every man’s journey through life. It is in this sense that Tolkien wrote in his celebrated and cerebral essay "On Fairy Stories" that "the fairy story … may be used as a mirour de l’omme" (the mirror of scorn and pity towards man).
In short, we are meant to see ourselves reflected in the character of Bilbo and our lives reflected in his journey from the Shire to the Lonely Mountain.