Do people really like the Hobbits? I might be wrong, but when LOTR was rocking, it seemed to me that most people didn't care much for the Hobbit part of the movie.
If by "people" you mean the average movie-goer who saw the movies but haven't read the books, I'd say absolutely. Sure they're not "badass" like Aragorn or Boromir, but as far as the movies go, they made The Hobbits out to be more than just comic-relief by the end of Return of the King, they each had their own individualized moments of being awesome - which I think helped audiences connect with them.
Between Sam fighting Shelob and (seemingly) saving Frodo's life every two minutes, Merry volunteering to to join Rohan's army and stabbing The Witch King to stop him from killing Eowyn, Pippin lighting the beacons of Minus Tirith as well as killing an orc before it stabs Gandalf in the back. And I don't think there was a dry-eye in the place when Pippin sang "Edge of Night" - at least I think that was it's name - during Faramir's charge.
I remember seeing RotK in the theater, during the final battle at the Black Gates, when Aragorn turns to his army and says "For Frodo" and charges at the army of Orcs, remember when Merry and Pippin were the first to charge after him? The audience I was with cheered like crazy (as they did when Sam showed up in Shelob's lair and said "Let him go, you filth.")
I guess my point is that based on my own experiences, audiences definitely cared about the Hobbits