"Fair use" does apply to Led Zeppelin's two lines referring to Gollum and Mordor in the song Ramble on,  "fair use" does apply to naming a codebase "Smaug", and yes "fair use" does apply to the trivial half dozen lines of use in the Moria area.

However "fair use" does NOT apply to fan fiction or writing stories using the characters and settings in an author's works.  Consider Margeret Mitchell's "Gone with the Wind" and the coveted rights to produce its sequel awarded to one author by the estate.  Nor does the internet change the notion of "fair use" in respect to author's copyrights, specifically literary works.  You yourself undercut that argument when you suggest by implication that people can't and aren't distributing LOTR or the Hobbit wholesale on the internet.  The same is true for derivative works.

Shadow's of Isildor as far as I can tell is certainly fan fiction, derivative and not "fair use".  So is your Star Wars game as far as I can tell as everything I've read makes extensive use of characters and settings from the works.  I'm not suggesting rape-and-paste nor am I suggesting it's unoriginal.   I am suggesting it is as derivative as me writing a new Harry Potter novel or me writing a new OtherSpace novel.  

I am going to make some assumptions here so bear with me.  I don't have a dog in this hunt.  I am going to assume you don't have license from Lucas either.  If you do then no matter.

First the bad news, both your game and SoI are in fact copyright infringements of Lotr and SW.  Derivative works aka fan fiction.

Second the good news, both the Tolkein estate and Lucas Films tolerate non-commercial fan fiction.  

If they tolerate it, it's fine with me. :-)
So that's my final answer.