Hardly a realm , more like a backwater of a maybe twenty pretty farming villages or so, where all the latest fashions arrive several years later, and no murders are committed, where the people are very happy and self contained within the Shire.
It is true that the Welsh and Cornish are of a darker complexion, but I`ve always seen Bilbo as Anglo-Saxon, a bit like Devon, where there`s mixture of Saxons and Angles . The Romans for 500 years to the overlords, the Normans came and conquered Britain not forgetting the Vikings that took most of the northern lands ... that's why English is such a rich language, there so many names for similar meanings that's interwoven into our English language.
Doctors in Britain arn`t considered upper class as they might be in the states, unless they have a little blue blood in there vains. Tolkien was writing his books in the 1930s / 1940s and Britain now is not the Britain 30s/40s, it was a total has different culture, a very much class based societies where you knew your place.