Here we see another example of how Balin will be a leader of dwarves eventually: he is the only dwarf to go even partway down the hallway with Bilbo. But, I'm not sure that's all that impressive, although I suppose if he had gone with Bilbo it would have turned out much worse for them both, since Balin is not invisible and not nearly so quiet. But, he may have simply known that Bilbo needed someone to take the first few steps with him, and once he was launched down the passageway and had too much psychological momentum to turn back, Balin can stop there and let the burglar go ahead.
The moment when Bilbo sees the first light of the dragon's fire ahead, and stays there for a long while terrified, is well imagined. It is somewhat similar to the dwarves having come this far without a plan for getting rid of Smaug; Bilbo did, in fact, come this far with the idea that he would be a burgler of a dragon's hoard, but I think not until he sees the first flicker of dragonfire does it become really real to him what he is about to attempt.
The conversation between Smaug and Bilbo is delightful, and results in both of them revealing more than they intend. In both cases, I think, it is because part of their mind's are thinking about Bilbo's riddles, and that distraction tricks them up. In Bilbo's case, he is thinking about making them, and pleased with himself for doing so, and uses the word "barrel" without thinking that it basically implicates Lake-town. In Smaug's case, he reveals his underbelly and invites Bilbo to take a look. One assumes, though, that Smaug's mistake is based on the deeper flaw, since he is apparently not even aware of the possibility that he could have a bare patch in his armor.
"Every worm has its weak spot", said Bilbo's father. Which makes one wonder what kind of stories Bungo Baggins, essence of Baggins-dom, had been listening to.
Thorin does, again, just barely listen to Bilbo's advice enough to close the door and move them away from it, so that they are not caught in Smaug's attack on the side entrance. He is not great at planning, and as we shall see he is not great at diplomacy, but he is willing to listen to good advice in regards more practical and tactical concerns.
Chapter 13