The problem is that the hobbits are BETTER fighters than dedicated warriors from human and elven cultures.
Ok I do not think this is the case - I think they are equivalent.
Bow
Good shot is not an issue. You have a hobbit with good shot, I will have a barding with "favoured body" to damage. Good shot will make you better than me at weapon skill 2. At weapon skill 4 we will both be hitting a lot, but my extraordinary hits could likely be doing 15 damage a pop, the equivalent from you doing 8 damage. That is a considerable difference. If we want to just go for penetrating hits, well I can aim and do a penetrating hit about every other round... you can shoot and do a penetrating hit about 56% of the time with Keen on your bow - that keen could be fell on mine, and I would be throwing out TN 18 wounds at almost same rate as you throw out TN 14 wounds.
Defence
Defence? I'm don't think this is an issue either. You said yourself this should be a strong point. A hobbit could get an excellent defence... if they build for it they could have defence 6 (wits) +3 (favoured) +1 buckler and +1 enhanced buckler... that's a parry of 11 costing 2 virtues AND your favoured score going in your joint highest stat
An Elf could have a parry of 7 (Wits) +3 Tower shield +1 (reward) = +11 for the less virtues, as could a woodman (even higher in a forest). Ok it costs more endurance - but you have
more endurance.
The other end a Dalish man or Beroning can both have wit's 4 and get a situational +3 parry virtue... and then go with the tower whild idea above - parry 11. Dwarves can get a better parry when underground, and a base parry of +9 if wanted.
So most people can get there
Melee
Here might be the biggest issue - but I don't think it is. The humble shortsword is not good. Apart from the dagger it is the worse melee weapon in the system.
So the two key parts of combat are Endurance damage and Peircing blows.
Under piercing blows a halfling with a kings blade has great chance of inflicting one; this is there lucky strikes from the book.
An elf, with a one handed spear and one virtue, can be getting piercing blows on 33% of there attacks
The hobbit's chance depends on their skill with the short sword but very roughly is 20%+skill in shortsword*10%. This doen't take into account if the hobbit hit's or misses...but at skill 4 it's a peircing blow about 60% of the time.
So they are great at causing peircing blows. This is great when you are fighting foes with low armour, and not great at high armoured foes... a hobbit with skill 3 fighting an orc with 2d armour would take him down about 30% of the time - and about 40% of the time with skill 4. I's not great aginst high armour foes (skill 6 takes down a 4d armour about 8% of the time)
However
Endurance is the other half of battle; and here Halflings low Body rating is very telling. They just don't go around one-shorting Orcs... or really damaging trolls. In our campaign we have a weakiling body 5! dwarf but with grudge he's mowing through orcs left right and center. Being able to weild a two handed weapon means his normal hit's are the equivlant of the greatest hits of the Halflings... his epic hits do 21 endurance damage. It's quite noticeable.
So on this half of combat Halflings lose - the mattock, two handed longsword on an elf or the great spear of the Beoring just kick ass
so much more. and against the one handed weapon wielder? well he dishes out more on every extraordinary success... the body 2 hobbit is harder to hit... but his great successes do 7 not 10 damage... and 15 is out of the question.
I would say most (80% or 90%) of the "monsters" killed so far in the PbP I'm in have been due to endurance loss; so I wounden't worry to mcu about the hobbits
Two more points
Armour and endurance
Halflings have very little armour because they have very little endurance - this means when they are hit with penetrating blows it can be a real issue. They just cant have the dwarves "it's only a flesh wound" durability
The combat hobbit; It would be possible to build a combat hobbit; but you do not excel over other characters. If you want to deal out endurance damage (the halflings weakness) you need body 4 - which means you will have wit's 4... so your parry could be 8 with two virtues - good, but not astounding.
Then you pile virtues into fell handed to up your damage rating to 5 or 6.
You are pretty scary - have a nice in the party and have totally built for combat - that is your concept so it makes since you are dangerous... but another race "totally building for combat" in the same way would be equally effective in another sphere. So I don't think the combat hobbit is something to worry about.