The second one, I guess I can make it quick.
He was a hobbit, or a creature much like a hobbit. He found the ring! He lived a thousand years and it changed him dramatically. Then he lost the ring, and he has been searching for it ever since.
Such a pitiful thing really, he lost his 'precious'....
Its a warning as to why the ring is a bad thing (so are all those dead people of course). That ring made him become what he was.