first off the exhaustion thing was joke...
secondly what i mean is lets go with your light example if gandalf didnt have his staff and went to use light magic or what not it go everywhere probably giving away their postion much quicker and also lets say gandalf was like hey i want to kill that orc with fire say without his staff hed shoot fire every which way burning a bunch of stuff including his friends...or former friends anyway
the staff is almost like an aiming device
oh and with bilbo one can assume being the pyrotechnition he is gandalf had in his possesion what you could consider a smoke grenade.(he did have prior knowledge o Bilbos plan remember"so you mean the go on with your plan then?")