Frodo's In "The Hobbit: Part 1&2"

Elijah Wood has officially signed onto Peter Jackson's "Hobbit" films, because he basically has nothing else to do now. He's returning as the little hobbit, Frodo.
First I didn't know how the fuck that's possible, as I thought "The Hobbit" is set way before Frodo was born? But I do now, supposedly he's in the star and the end of the films. He begins by reading the "Red Book" which will tell us the on-screen story of Bilbo. So basically, Frodo is knida telling us the story.