I really hate the Goblin fight and the look of the Goblin king. I would cut those images away completely.

An idea I'm toying with is to let some sound from the dwarves meeting with the Goblin king echo down into the cave where Bilbo has fallen so that we can still hear some of it in the background. Then we don't see the dwarves again until the passage where Bilbo jumps over Gollum. The point would be to keep everything in Bilbo's perspective, but not to miss the context of the Goblins calling the orcs.