This is what I wrote on Old Bilbo back in the Erebor Scout thread:
I love that you guys want to put old Bilbo in a scholar position/theme in my favourite faction, Imladris, but I think he should not have spellbook related powers. Even as a scholar, writer, and poet, Bilbo doesn't have any power or knowledge about elven magic, so I think he should stay away from the spellbook. Leave the spellbook for the sages and mages of Imladris.
I suggest instead that he could be a building feature instead of a hero, by buying an upgrade you could get Bilbo wandering inside Imladris castle or around the Library building (or whatever building he would be attached to) and by selecting him or the part of the building he ought to occupy you would have access to his power(s). I suggest for those to be primary minor Hero Supporter abilities with the theme of singing or reciting poetry or Ian Holm's voice saying something about the history of Middle-Earth. I remember reading in Fellowship that Bilbo often presented his literary works in Elrond's Hall of Fire to elves' delight. To be sure, Bilbo's abilities should be minor.
I really detest the idea of Old Bilbo fighting, even from a distant, or venturing outside the gates' of Imladris' castle, for by the time he arrived at Rivendell after forsaking the ring, his adventures were over. As I mentioned above I would have him as an immobile building feature to the Library, by "immobile" I mean only to say that the player wouldn't be able to control his walking, but the character would still stroll about the gardens of Rivendell of his own accord, and would be still be selectable in order to access his abilities.
Thus, being honest, I don't really like @DrHouse93's ideas of the Master Burglar or Experienced Traveler abilities. I agree with @Adrigabbro that Need for the One Ring doesn't really fit Imladris. I also don't like the idea of Old Bilbo sharing or stepping on the roles of Elrond and/or Erestor, that being similar to @hoho96's first option of focusing Old Bilbo on "wisdom" and "studies". Both Teaching of the Halflings and Weaknesses of Monsters are very similar to two of Erestor's abilities in 3.8.1, one in which he gave military council (and thus bonus) against a specifically selected enemy unit and another in which he gave experience to Imladris' farms. I don't think it is fitting for him to have a ability like Weaknesses of Monsters because, for all his adventures, what knowledge about monsters and other enemies could Bilbo provide to the long lived Noldor of Imladris that they do not already have?
Particularly I belive that Old Bilbo's abilities should focus, thematically speaking, not in his studies or wisdom, but in his creations' of literature and poetry. Mind that I'm not saying that Bilbo ins't studious or wise, just that his knowledge seems to me to pale in comparison of the elven scholars' own. I think a focus on his creative side, rather than studious, would do a great deal to make him unique in a faction devoted to knowledge and study.
I think he should be a hero/building feature with abilities toward hero and/or unit support thematically based in his songs, poems, and oration, as is mentioned in Fellowship (and I have already mentioned above) that he presented this pieces in Elrond's Hall of Fire to the elves' delight.
If going in this direction with Old Bilbo, I also think he should have a minor role in Imladris. That he shouldn't have more than three abilities, given that Imladris already has other hero and unit supporters, even though these are thematically different to Bilbo in their abilities.
I am thinking about abilities for Old Bilbo based on the suggestions and concept I made, but I do not wish to convey mechanics that I did not yet thought entirely through. In this case I will only share a general idea:
*Chronicle of Middle-Earth: Bilbo recalls an old story of Middle-Earth and makes it into a poem, it either warns against defeat or elevates the spirit of elves for a new victory. This could positively affect heroes in an area or all the common units inside the castle defending it.
*Adventurous Tale [there can definitely be a better name]: Bilbo narrates one of his old adventures to the humour of the elves, and fills Elrond's halls with joy and laughter.
*Praise to Elbereth Gilthoniel (I
think Bilbo really made a song to Varda in Fellowship, but I'm not certain): Bilbo sings a praise to the stars of Elbereth, this soothes the elves in the castle and slowly cures them (by just a bit).