Cite? 
More quick answers!
-re Bilbo: Frodo knew what Bilbo what was planning, but it still made him sad. The party guests didn’t know about the ring, just thought the disappearance was a party trick from Gandalf.
-re Elrond/Arwen: she is his daughter. Actually, Galadriel is her grandmother, but that doesn’t mater here. If an immortal Elf mates with a mortal they choose mortality, death. Which would make her father sad.
-yes, many many slash stories. I’ll try to dig up the link to the very funny Secret Diaries, but not til you’ve seen all the movies.
-In the books Frodo is NOT a damsel in distress. I read the books first so he’s still my hero.
I linked to them above.
Thanks, RNATB! They really are classic.
Sheesh, looks like all of your questions have been answered, choie. Well, enjoy The Two Towers, and then on to The Return of the King. You’re in for a real treat!
I first read the books in high school and was instantly hooked. I’ve re-read them several times over the years, most recently before I saw each movie, and it was wonderful to be able to compare and contrast them. That said, there’s nothing wrong with watching the movies without ever having read the books. If you really like the movies, though, the books will add a much greater degree of context and complexity, to say nothing of being beautiful writing in its own right. Of course, it’s not for everybody, and some people just find Tolkien not to their liking.
You may wish to start with The Hobbit, which was largely intended for children, as a good, easy written intro to Middle-earth. It tells the story about how Bilbo found the One Ring and met Gollum in the first place, 80-some years before the events of Fellowship.
One of the minor plot threads going through the books (and the movies) is how Merry and Pippin mature. They go from being basically teenaged cock-ups (particuarly Pippin) in the first movie to…well, that would be spoiling it for some of you. 
Suffice to say that, while they aren’t the major characters, Merry and Pippin do have their own story arc.
While it does seem highly unlikely that JRRT intended to put in any homosexual subplots…the Very Secret Diaries are just one example of the field day that “slash” fan-fic authors have had with the stories (Frodo/Sam, Merry/Pippin, Aragorn/Legolas, Legolas/Gimli, etc., etc.).
They are reborn in the Dying Lands when they are killed in Middle Earth (tho some may dispute that-cite: scroll down to “Death.”).
In point of fact Beren and Luthien are ancestors of both Aragorn and Arwen. Which essentially makes them “kissing cousins.” Cite.
As already said, they had rules. Gandalf could use his powers, without restriction, against the Balrog (and Saruman) because it was more or less of the same power level as he (for lack of a better term). Against “lower” beings, he wasn’t allowed to do such things. I always interpreted the battle in Orthanc between Gandalf and Saruman as a battle of wills.
Most of this has been answered already, but since I went and typed it all up:
Frodo, Merry (Meriadoc Brandybuck), and Pippen (Peregrin Took) are all tenuously related, and the closest thing Hobbits have to “gentry”-- The Bagginses are landed old money, Pippin is heir to the Thane (a title which traditionally attaches to the head of the Took family), and Merry is the heir to the Master of the Hall, semi-official leader of Buckland, a sort of semi-independent outcropping of the Shire. Sam, though, and his father before him, is a gardener in the employ of the Baggins family.
The other three Hobbits involved (plus a fourth who didn’t go all the way on the adventure and didn’t make it into the movie, one Fredegar “Fatty” Bolger) know just how deathly serious the whole matter is, and know that they need to get Frodo safely at least as far as Rivendell. Merry and Pippen’s clowning is largely whistling in the dark, and largely just their style (similar to how the Weasley twins kept their sense of humor while fighting Death Eaters).
I’m not sure precisely where you’re getting that from, but the short version is that he and Arwen do love each other, but Elrond doesn’t think he’s good enough to marry his daughter, and so prohibits it until Aragorn can prove himself. You’ll see later precisely what form that proving takes.
Aragorn has gone by about a dozen different names at various points, but his true name would have significance for very few people. I don’t remember precisely how it went in the movie, but Boromir should not have reacted at all to “Aragorn son of Arathorn” (though he should have reacted to Aragorn’s full lineage).
He’s extremely powerful, but magic in Middle-Earth is a lot more subtle than in many fantasy stories. “Zapping left and right” just isn’t the way things work in Tolkien’s works.
Same is very highly devoted to Frodo, but there’s no indication that his devotion was in any way romantic or sexual (despite the impressions of many slash writers). Sam eventually settles down with a pretty hobbit lass (Rose Cotton; you saw her dancing at the party in the beginning) and has many children.
Mithril is an extremely lightweight, extremely strong, and extremely valuable metal (that chain shirt was worth approximately as much as the entire Shire). It didn’t heal him from that spear; it prevented it from skewering him in the first place, exactly as armor ought to.
Galadriel is good. Her point there is that, were she to take the Ring, she would surely become evil, and a particularly terrible sort of evil.
His naivety and trusting nature are part of what qualifies him to be the Ringbearer, as it means that it’s not as corrupting for him as it would be for most.
The first book ends pretty much in the same place as the first movie. The ending of the second book/movie don’t quite match up, though (some material that was at the end of the second book is at the beginning of the third movie).
Further to what some others have said:
It is not the norm in Elf-Human pairings (rare enough as they are to begin with) for the elf to choose mortality. Most elves don’t have that option at all. Elrond and his brother are actually of mixed Elvish and Human ancestry, and did have that option (Elros chose to be counted among Men, and was the start of the human royal line, while Elrond chose the fate of the Elves). Arwen claims that she has also inherited the choice, but it’s not entirely clear that she has: Elros’s sons did not have a choice (and resented the choice their father made), and when Arwen does eventually die, it’s of grief, not old age (elves can canonically die of grief).
Aragorn and Arwen are, as mentioned earlier, very distantly related: Elros, brother of Elrond, is Aragorn’s distant ancestor. Which makes the two of them first cousins, about 500 times removed. This is not a close enough relationship to be troubling either from a genetic or societal point of view.
Elros and Elrond were, in turn, partly descended from Beren and Luthien, the previous Elf-Human pairing Aragorn told of. Luthien was literally half-angel, and the most beautiful maiden of any race who would ever live, and Arwen was said to be in the image of her ancestress. Aragorn, while extremely badass, is still nowhere near as badass as Beren was (and even at that, Luthien’s father didn’t think Beren was good enough for her, either). Beren and Luthien’s story is one of the tales told in The Silmarillion, the myths of ages earlier that form the background for Lord of the Rings.
Chronos, Chronos - Remember the OP doesn’t know the whole story! Don’t tell him what the characters eventually do! (Sorry - I probably did the same thing & you know LOTR lore better than I so I’ll just shut up now.)
Got a cite for that? My recollection is that clearly the choice was extended to the children of Elrond by the Valar, when they met in counsel to figure what to do with the “problem of Peredhil”.
One notable change from book to movie is the fact that Frodo starts off aged 33 at Bilbo’s 111th party. Sam, by contrast, is 21 at that point. They have a close friendship, but it’s very much older/master - younger/servant friendship. Think of Driving Miss Daisy, if not quite as extreme.
Peter Jackson and others have likened it to the close friendship and working relationship of a British army officer (as Tolkien was during WWI) and his batman, a combination valet/assistant/boon companion. The batman would be a rung or three down the social ladder from the officer, but no less valued.
The ring had eventually warped and twisted Gollum, but it had not been anything more than an interesting trinket for Bilbo. Even Gandalf did not realise that it was the One Ring until after Bilbo “retired”.
I think they were told in Rivendell.
He’s Human, she’s not. She may live for thousands of years, and he doesn’t want to inflict the pain of his death on her.
Elrond (who is himself a half-elf) is Arwen’s father. Elrond chose the Elven way of life. He had a brother, who, IIRC, chose the Human way.
But he, too, fears the pain that Arwen may experience when her mortal husband dies.
I don’t recall any details Tolkien may have given on Elf love. Do they pair/mate for life?
Somehow, magic may have been seen as disruptive to the natural order of things. Elven magic is pretty subtle (nourishing bread, chameleon cloaks), and they learned their craft from the creators of the world (the Valar and Maia).
Gandalf appears to be under some mandate to use as little power as necessary to achieve the goals of getting the Free People to resist Sauron. 99% of the time, that involves offering little pearls of wisdom here and there to the right people. When they show up in Edoras (?) in movie 2, the gent who meets them (to confiscate their weapons) seems to recognise gandalf right away, implying that Gandalf gets around.
As already said, they were not peers. And he may have used that address as distinguishing Frodo from Bilbo (who he might’ve called “Mr. Baggins”) rather than signifying familiarity.
Slept, refreshed, and soon off to work, I see others have been busy. I love it!
Thanks, good detail. As a bit of background, and without going into mind-numbing detail (we don’t want to scare choie away), would you or someone else please explain the Dying Lands for choie? In part, to explain what Galadriel meant when she said “I will diminish, and go to the West” after her freak out in front of Frodo. I found that fascinating when I came back from the movie, after scratching my head and saying “what’d she say?”.
And what “the Valar and Maia” are. I understand what they are, but I couldn’t explain them in an articulate way.
All Choie needs to know at this point is that Valar and Maia are gods of differing levels, and he/she doesn’t even really need to know that.
When Galadriel says she will go into the West, she will go to the Undying Lands - sort of Elf heaven, where all the elves eventually go as Middle Earth’s magic leaves at the end of the third age. for Choie: it’s like King Arthur’s Avalon, or the Norse gods’ Valhalla.
(Yeah, fellow Tolkien geeks, I know those aren’t completely accurate; please let’s not scare the noobie away. We want to hear what he/she says about the next two movies!)
Undying lands, actually. The Blessed realm, where the Valar and Maiar live. Along with some elves who answered the call of the Valar long ages ago.
They’re the Undying lands because the undying folk live there. The lands do not confer immortality to the likes of us mortals. They are part of the world, but presently slightly removed from it.
Elves whose bodies are destroyed go to the Undying Lands in spirit, where they may eventually get issued new bodies. Mortals whose bodies die/are destroyed have their spirits leave the world entirely for places/fates unknown, never to be seen again.
The Valar and Maiar are beings (aka Ainur), who sprang fully formed from the thought of Eru Iluvatar (the One Allfather) and were with Eru before the world was created. The Ainur helped Eru create Arda, the world that is, and to realize it. Many Ainur descended into Arda to help fulfill its history. The mightiest of the Ainur are referred to as the Valar (15 in total, including Melkor, the fallen Vala) and the lesser Ainur are called the Maiar, and include Saruman, Sauron, Gandalf, Balrogs, and a few other things to be named later.
Fun fact: Tolkien’s map of Middle Earth fits almost perfectly over the map of the West Midlands (region of England) circa 1930. In case anyone wants to experiment at home, you’ll find it pretty easy if you can locate the Black Country area, between present-day Wolverhampton and Birmingham, and work from there.
There’s a square mountain range, sporting a volcano, in England?