[Man-of-the-Wold]

I don't think there is much question that Legolas, like Arwen and her brothers are among the relatively few Elves born in the Third Age, although there may be quite a lot more of that "Age" among the Nandorin East of the Misty Mountains.

He recognized the Balrog for what it was, because as a Sindar he was very well steeped in such lore, unique among the Fellowship. (Balrogs had relatively little involvement with the Edain) It is doubtful there was any other explanation for what they saw and felt, and as an Elf, Legolas's perception is not limited to mere physical clues. He probably felt something of the demonic power on another level.

Gandalf's apparently less quick realization of the Balrog is easily explained by the fact that he does not have direct contact with his Maian memory or senses. The Istari have to relearn most everything. And, what he might have gathered in Rivendell or elsewhere, he would not have bothered with, since the Balrogs were assumed gone, not having been seen throughout the Second Age. In the Books, as opposed to the Movie, the existence of a Balrog at Moria appears to have been completely unrealized by anyone, with the likely exception of Galadriel.

Interestingly, remember that Aragorn had a very strong sense about the doom awaiting them in Moria, and he may have had an implicit inkling, and only did not say the obvious when the Balrog ultimately appeared, as he would have been the only other "Fellow" who had even ever heard of a Balrog.

It seems most likely given the Unfinished Tales' account of Thranduil and his father, that Legolas of Mirkwood (as opposed to the Gnome, which I recall Tolkien not really retaining beyond the "Lost Tales!) was born some time in the Third Age.

Whether it was very early like Elrond's children, or later after the appearance of the Necromancer is pointless. The fact that he'd never actually been to Lorien before would indicate that he hadn't been around for most of the Third Age. But suffice it to say he had been alive for centuries. In the conversations of the three hunters it is indicated that though Legolas is several times older than Aragorn, he has ironically not travelled anywhere near as much.

His seeming both child-like and very old at the same time is exactly typical of a Middle-Earth Elf. Beyond the great heroes and leaders, Legolas is perhaps the only somewhat regular Elf that we ever get to know. And, Elven wisdom is not exactly the comparable to human maturity, and I think we are meant to appreciate Aragorn, Imrahil, the Grey Company and other great Men in the LotR, because of how much they impress Legolas and win his allegiance.

Of course, he is not ordinary and is an elfin prince, and should be classified as a Grey Elf, even if is mother could have been Nandorin, which is what I assume.

Again, the Nandorin of Lorien and Mirkwood seem to be a bit of an exception to the rule of Elves in decline. And their population may have seen something of a modest upswing in the Third Age, rebounding from losses in the strife of the Second Age.

Both Lorien (especially when Galadriel and Celeborn go there after the Balrog appears and Amroth's departure) and the Kingdom of Mirkwood are significant realms not mere refuges.

Also, what we see in the Hobbit would suggest that Thranduil's realm was not exclusively a place for ancient and wise elves, and that many of the elves in Mirkwood are very plausibly "Third Agers" like Legolas, so that people as old as Fangorn would have been quite remarkable for him.

Again, I think the reason he ends up in the Fellowship as opposed to a Glorfindel or Erestor is that he really does represent an Elf of Middle-Earth in those days. The Noldor and the great Sindar are fading, and have no business with the such affairs. Lindon is probably mostly Grey Elves/Falathrim, and Legolas can represent them by lineage, as well as the Elves (actually Eldar) East of the Misty Mountains, where the only really significant societies of Elves in Middle-Earth are still quite alive.