Rethinking Hobgoblins

I think it's safe to say that when most RPG players hear the word "Hobgoblin" they tend to visualize something that boils down to "a Goblin but bigger and with decent equipment". If we're mapping out an equivalency between Lord of The Rings and Dungeons & Dragons then Hobgoblins are the Uruk-hai to Goblins' Orcs (as an aside, I suspect that Bugbears are based the Olog-hai).
Of course, that isn't what Hobgoblins were like folklore (at least according to wikipedia):

Hobgoblins seem to be small, hairy little men who—like their close relative, brownies—are often found within human dwellings, doing odd jobs around the house while the family is lost in sleep. Such chores are typically small deeds, like dusting and ironing. Often, the only compensation necessary in return for these is food.
While brownies are more peaceful creatures, hobgoblins are more fond of practical jokes. They also seem to be able to shape-shift, as seen in one of Puck's monologues in A Midsummer Night's Dream. Robin Goodfellow is perhaps the most mischievous and most infamous of all his kind, but many are less antagonizing. Like all of the fae folk, hobgoblins are easily annoyed. They can be mischievous, frightening, and even dangerous.^[3] Attempts to give them clothing will often banish them forever, though whether they take offense to such gifts or are simply too proud to work in new clothes differs from teller to teller.

While certainly an interesting take, hairy little housekeepers aren't exactly prime material for most fantasy campaigns. At the same time, the militaristic Goblin jocks are a bit too overexposed. As an alternative, I present the Hobgoblins from Magic: The Gathering's Shadowmoor block:

Fair warning, I haven't been able to read the novels so the precise details might be off, I'm just going by what's on the cards. Shadowmoor's Hobgoblins are related to the setting's Goblins (who in terms of behavior are basically D&D Orcs). But they live in cozy cottages and pursue agrarian existences. So this is tying back into that domestic angle while also homaging Tolkienesque Hobbit/Halfling lifestyles. At the same time, they still have a sinister edge to them, as the flavor text for Hearthfire Hobgoblin (pictured above) states:

Hobgoblins are best left alone. They sharpen their farm implements far more than is necessary for their work in the fields.

 So behind this idyllic Shire-esque surface there's something dangerous, something murderous. But still, despite their seeming homicidal tendencies they don't seem to bother anyone who doesn't bother them. But look at the flavor text for Rugged Prairie:

Hobs bury their kin far from home. They believe the dry, open ground keeps hags from stealing the bones and gwyllions from stealing the spirits.

So what happens if a party of adventurers or Joe the peasant stumbles onto a Hob funeral? What happens when a Human village starts expanding out into Hob burial grounds? Sounds like an interesting potential encounter.

Extracting these Hobs from their native setting, think about how they could fit in to a "Traditonal" Fantasy setting. How are Hob-Halfling relations? What about Hobgoblin-Goblins relations? Are the Hobs ultimately just a weird off-shoot of Goblins or are they the product of Human-Goblin/Halfling-Goblin/Hobbit-Goblin pairings?

The last idea to consider is a bit more radical: Give Halflings the boot and replace them with Hobs. If the Short Guy PC race is composed of rustic axe-murderers instead of rustic thieves then it changes the flavor of the setting to something more sinister.