I would have thought that your drawing of Bilbo was already quite good, but when compared to the Rankin/Bass image, your version looks frigging amazing :P
My favorite features are the lighting (as in, how Sting's gleam reflects off of Bilbo), the young hands (not a disproportionate amount of wrinkles) and his youthful face (Bilbo wasn't terribly old when he went on his first adventure. In human years, he was around 30, I believe.)
I agree with the previous comment that Sting should be a bit longer, but I am also confused by the curve of the hilt. Is it actually going around Bilbo's finger, or is it just an optical illusion?