True, it's not a substitute. Added to that is that I think I recall hearing that some of the body-doubles were actually children. You have to wonder how cost-effective it is also when, evidently, they had to create both "regular" and large sets for some of the scenes and do extra takes, some with the actors playing Hobbits being depicted in oversized (to them) environments, and then with the actors playing average-sized humans on the same set. They also had to do additional filming in a smaller version of Bilbo's home to get Gandalf banging his head on the ceiling, but of course that wouldn't have been helped by casting, unless they had found an actor 40-50% taller than McKellan to body double him for that shot, in order to use the same set designed for the actors playing Hobbits.