He makes a sign on Bilbo's door that the dwarves interpret to mean "burglar for hire", which brings them into Bilbo's house.
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They all look different They have different colored hoods.
The cave was dry and unoccupied. What they didn't know was that it was the 'front door' for the goblins living in the mountain. The goblins discovered them and captured them, but not before Bilbo shouted a warning that allowed Gandalf to escape capture and ultimately rescue them.
When? At the beginning, Gandalf the Grey chats to Bilbo saying he is looking for someone to go on an adventure. Bilbo, being timid at the start, is a little rude to Gandalf, but invites him to afternoon tea. Gandalf laughs and with his staff marks the front door "burglar for hire, etc". Later a knock on the door and after a while 13 dwarfs and Gandalf are in Bilbo's Bag End residence: Dwalin, Balin, Fili, Kili, Gloin, Oin, Ori, Nori, Dori, Bifur, Bofur, Bombur, and Thorin Oakenshield. During the adventure Bilbo is separated numerous times from the dwarfs, and aids them in their escapades with his new found confidence and bravery and his magical ring.
Generally speaking, they don't trust them. The issue is that Elves are slow to decide and place little value on material wealth. Elves tend to rely a lot on one another, living very cimmunally, which is, essentially, the opposite of the Dwarves.
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