Headcanony things to follow, all totally subjective!
They’re receding, yes. Mentions of the Ring can bring a resurgence of vague anger, possessiveness and secretiveness. However, as his mind begins to drift and age creeps up on him at last, the obsession is beginning to fade. It took the very sight of it to bring Bilbo to near-violence, after all… and even then he controlled himself (brrr).
The Elves have not really been subjected to any unpleasantness: these matters, as Bilbo would say, are his own private business and no nosy busybodies need go poking about. He would most likely seclude himself when he has a “funny turn”. I expect he always did, tbh, and didn’t realise that it was the Ring encouraging to do so, pushing him further into his own isolation.
Thank god for Frodo.
It’s remarkable, actually, just how resilient Hobbits are – and Bilbo in particular. I honestly don’t know if anyone else could have carried the Ring for so long, and retained so much of themselves. But yeah. Thank god for Frodo. Those 12 years that Bilbo lived with Frodo might (and this is just a personal idea) have been the saving of him.
(And you are super-sweet to say so! Thank you so much!)