Okay, then why does there need to be rules? If Elves are magic and can counteract gravity, and Mithril is magic and can absorb the impact of cave troll stabbing with a large spear, then there are no "rules". Or at least they don't apply when the story requires it.

I only require rules when there is an established reality present, such as a fiction set on modern day or past day Earth. They can be bent to serve the story, but not broken. Fantasy doesn't usually have that (although GoT makes a great cross between the two).

-If everyone can walk on snow then there is nothing special when Legolas does it.

I never said that, I simply pointed out that it breaks the rules. If you want to say "it's magic!", that's fine. But that means that there really isn't a rule because magic can overrule it.

-Mithril is a semi-magical substance (note that we do not possess it in the real world). Tolkien may not have thought through the incident with the spear sufficiently, but he did have Bilbo struck in the ribs and he did have it leave a nasty bruise, so there were consequences.

When a person's chest is crushed, even without penetration, it would affect their lungs and heart, causing internal bleeding, perforated or collapsed lungs- a person can even drown in their own blood because of that. Rupture the aorta and someone is dead almost in less than a couple of minutes. It could also break the spine. That is essentially what should have happened to Bilbo, but again, magic!

-Middle-earth IS supposed to be past-day Earth (if a romanticized and fictionalized version of it). That is why the rules of normal physics should only be broken when magic is directly involved.

Except that it's not Earth as it shares almost nothing with actual Earth except part of the name and men. Otherwise, it's simply a world Tolkien created using influences from European and Biblical mythology, some European history and the landscapes of different areas of Europe.

Consider it in terms of a more typical special or unusual ability. . . some people can break glass with their voices. This is not a common ability to have, and when a person can do it, people take notice. You might become a party favourite or end up on America's got talent or some such thing. But if everyone was doing it, then there would be nothing to see. See also contortionists, star athletes, powerful singers with numerous octave capacity and perfect pitch.

Middle-Earth is indeed supposed to be Earth, and most of the normal "laws" of Physics (the ones electrons and other quantum scale particles are constantly breaking. . . and the Universe itself, evidently) normally apply with some exceptions, and those exceptions are considered exceptional then and there as they would be here. If you make the paranormal the norm for everybody it takes the miracle out of the miraculous.