Child, a few quick thoughts bubble up immediately:
I think we need to be careful about calling fanfiction (of any sort) canonical; it can't be. Tolkien didn't write it. I think we need another term, say, canon-loyal or canon-friendly or canon-consistent.
The highest praise we tend to lather on an author, I think, is that a peice of fanfiction fools us into thinking that it's a lost work of Tolkien's. I remember feeling that way about The Last Ship, the Legolas and Gimli departure story. She fooled me! Well, almost. And to achieve that an author has to avoid contradicting one of Tolkien's direct statements. Frodo marrying and having kids contradicts Tolkien's direct statements about what Frodo DID do. Hence... you can write the story if you want to, but you've left the mainstream canon-friendly area and gone off into the alternative universe area. That's okay if that's your thing, but it's not what I'd call canon-friendly.
Where Tokien leaves grey areas, we are free to play, I think.
I think to write really safe (canon-friendly) fanfics it's best to stick to those grey areas and mysterious places, especially if you're going to get really creative. What happens in the Ered Luin? Don't they just look tantalizing sitting there on the mysterious western edge of the map? I always wanted to know. So when I wrote a fanfic, we ended up there-- just cause I wanted to see them! And nobody had written much about it (that I'd read) and so I was free to play, and Tolkien let me do it!
But if you mess with (say) Frodo, you've got to be SOOOO careful, I think, because TOlkien painted him so clearly, and if you don't get him just right, everybody knows It's Not Him. Same with Gandalf or Aragorn or anybody else that's been thoroughly painted by Tolkien. If you're going to be canon-friendly you've got to know what TOlkien already portrayed, and not contradict that, unless you fully intend to-- and then you're deciding NOT to be canon-friendly.
Good dragons-- I think your point of "what did Melkor start with" is very well taken. A balrog perhaps? Are dragons evil maiar...? Well, anyway, my point is you're free, I think, to make that stretch, or at least argue for it.
I hesitate to add an entire new bestiary to Middle-Earth via fanfiction; but on the other hand, Treebeard himself missed the hobbits and had to add new lines to his lists. So maybe nobody knows all the critter-types, including Tolkien himself. But I think they have to (or should) FEEL Tolkien-ish. But that gives us a wide range; from Gandalf and Elrond, to Bert and William, from Shagrat to Frodo, from Treebeard to the Balrog, and from Dragons to Neekerbreekers and Bill the Pony-- so what might be in-between? I would prefer to see some sort of tie-in to canon, such as your question "where would Melkor have twisted the dragons FROM", but is it mandatory? Hard to say.
As far as Trotter goes, "I don't see the harm in it."
(As long as Trotter doesn't end up marrying Arwen... HA! did I SAY that? Sorry.)
--Helen
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...down to the water to see the elves dance and sing upon the midsummer's eve.
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