[Eomer of the Rohirrim]

How could I get mad at my favourite estranged Scotsman?

It says that Bilbo (and Gandalf) had thought Frodo the best Hobbit in the Shire. This implies that they thought it when things were still normal at Bag End. (Translate 'normal' however you want to!)

But you're right; did dead Hobbits count? Hmmmm.....I'm going to go with no, probably not. But I still think Frodo was his favourite, even ahead of the Old Took.