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Bilbo wears the One Ring and becomes invisible to avoid capture by the wood elves. Then he infiltrates their fortress and roams around all the while being invisible with help of the Ring. Then he uses the Ring to help the captivated Dwarves escape the prison of Thranduil.
Bilbo fell down into Gollum's cave when the goblins chased them, and awoke in the dark. He crawled forward, and his hand felt the ring. He picked it up, and put it in his pocket.
Bilbo never actually knew that the ring was the Ring of Power, but I don't believe anybody knew that he had it until after the end of the book, The Hobbit. I could be wrong though.
He used it to escape unwanted visitors. He would put it on to avoid talking with people, particularly the Sackville-Baggins's.
Gollum was first known as smeagul but once he found the ring and killed his brother he was then known as Gollum (he got this name when the ring took controlled of him and he started making the chocking noise sounding like the word Gollum). He had the one ring for hundreds of years giving him unnatural long life. He became fixed on the ring and would kill anyone who would take it like he tried to do to Bilbo once he noticed he had lost it. Gollum would not give the ring up easily and tried to take it from Frodo in The Lord Of The Rings. Bilbo had it for much shorter time, so part of his own mind was still in control and was not as obbsessed with the ring as Gollum, and was able to find the will to give it up and pass it on to his adopted heir, Frodo Baggins.
In the book, it was Kili and Fili. ". . . finding still hanging there many golden harps strung with silver they took them and struck them; and being magical . . . they were still in tune."
No, even though he was able to accompany the elves to the blessed land, as a hobbit he is still mortal and will have eventually died.
Answer: Just regular magic or you could be talking about the 'light side', but there magic is still only regular magic. Answer: As far as I know, no special name for this was ever mentioned.
Bilbo is pretty unhappy throughout most of 'The Hobbit', so I don't know whether you'd say he was more unhappy in Lake-town than any other point. Tolkien mentions several times that Bilbo is hungry and tired and wants to be at home. He catches a cold whilst riding down the river from Mirkwood, so this might make him a little miserable, and I think he might also feel that the dwarves and the men of Lake-town were getting a bit carried away with all the old stories and forgetting that in fact the gold they want is guarded by a dragon, and they still have no way to get him out of the way.