The Hobbit is for children. It is not necessary to read it to enjoy The Lord of the Rings. LOTR is far different than the straight line to the dragon.

Having read LOTR first, and The Hobbit much later, I tend to agree with you. The characters are not likeable, even Bilbo is whiny and annoying. Gandalf is barely in it...

There's far more going on in LOTR, with far better characters, with far higher stakes. The world changes drastically, in the end. In The Hobbit things changed barely at all.