Boro, most of what you say about men in the US is the same in the UK! Never ever approach a Brit you do not already know very well with a hug or (heaven forbid!) a kiss on the cheek or you will be labelled as 'forward' and therefore suspect, whether male or female. Male casual friendships (and many serious, lifelong ones, too) usually revolve around beer, arguments about football and cars and a lot of competitive bragging and banter. Only in Yorkshire, where the men are confident of their ultra-butchness are men able to call one another 'love' with impunity.
Seriously, from what I now know about 'slash' (and I didn't even know what it was that long ago) most of it is created by and for adult women. I can't say whether some of them viewed the male relationships in LotR as actually homoerotic, but they may have imagined them to be. As odd as this may seem, a lot of women find gay couples either exciting or beautiful. This possibly says a lot about women and if they perceive such relationships as 'non-threatening'; this is a probable reason, as psychologists say the success of boybands is down to girls finding non-threatening, quite 'feminised' young men who they can have as imaginary boyfriends until its time for them to get a real one. And even adult women like to daydream about characters in films and on TV - this is why Mr Darcy (as played by Colin Firth) is now symbolic of the 'dream man' for so many women, and Helen Fielding cleverly picked up on it for Bridget Jones (about the only clever thing...grumble grumble...).
Some people will go on about this or that 'pairing' in LotR (or any other film) being 'gay' because they wish to joke, sadly, and labelling something as 'gay' denigrates it in their minds, so don't listen to everything you hear. But even from the books its perfectly possible to read homoeroticism into some aspects, e.g. the relationship of Frodo and Sam, and its not 'wrong' to do so.