This is substantially correct as a summary of the numbers-based rules, yes.
The inference that Bluff is a vital skill isn't correct though. The Hide skill is used to avoid detection in the first place. It is possible, but very hard, to hide after you've been detected... but the game acknowledges that someone very clever and skilled could pull off a "vanishing act" like that after they've already been spotted, so it provides some rules for it. But using Hide after being detected is not the normal use of the skill.
A ranger stalking through the woods to scout out a forward position uses Hide to avoid being detected at all. A thief infiltrating a keep in the dead of night uses Hide to avoid being noticed by the guards on duty while they slip in and out. If they need to cause a distraction in order to hide again, it's because they've already failed at their primary use of the Hide skill somehow, and in such emergency situations "re-hiding" will not always be the optimal response. (Fleeing is probably much better suited to most situations.) Buying up the Bluff skill is far from necessary, as there are other ways deal with such a contingency. Investing significant advancement resources into becoming especially good at vanishing from plain sight while observed is only one way of dealing with it; a flavourful one, it's true, but an expensive and very specialised way of developing a character.
It seems the problem you're trying to solve, is how to get consistent Advantage on attacks, without provoking opportunity attacks. This depends on a number of things.
What is the boss's reach? If the boss's reach is longer than 5 ft, then you will not provoke an opportunity attack to move behind your Dragonborn friend, if he is within 5 ft of the boss.
Must you use melee attacks? Using ranged weapons in a different location would be much safer, keeping you farther from the Boss, protecting you from Area of Effect spells or abilities, and giving you Advantage consistently without having to worry about disengaging.
You're also making a few assumptions:
- Hiding means you are completely undetectable. This is false. He can't currently see you, and you have advantage to hit the boss, but for an intelligent creature, it's pretty obvious you're behind the Dragonborn somewhere, and he can still move around your friend to spot you. Additionally, barring the Skulker feat, attacking will reveal you. Also, simply stepping out from behind the Dragonborn will reveal you if the Boss is looking in your direction. (Also note there are no facing rules in fifth edition by default, so this is subject to GM rulings) Note this makes hiding in melee rather impractical without specialized abilities.
- Nimbleness means you can stand in another creature's space. You may pass through another creature's space, but you may never end your turn in another creature's space, unless they are multiple size categories larger than you.
As it stands, the Rogue does not have enough actions to Disengage, Hide, AND Attack in one turn, so he would either provoke an opportunity attack, or not be able to attack. The alternative that would allow Advantage attacks every turn, is to use a ranged weapon, and hide at a distance.
Note, if all you're concerned with is getting your sneak attack bonus, all that is required is either having advantage or an allied creature is within 5 ft of your target. Keep in mind that applies to ranged or melee attacks: so as long as the Dragonborn is next to the boss, the Rogue will still get sneak attack against it.
Unseen Attackers and Targets (Fifth Edition SRD)
Combatants often try to escape their foes’ notice by hiding, casting the invisibility spell, or lurking in
darkness.
When you attack a target that you can’t see, you have disadvantage on
the attack roll. This is true whether you’re guessing the target’s
location or you’re targeting a creature you can hear but not see. If
the target isn’t in the location you targeted, you automatically miss,
but the GM typically just says that the attack missed, not whether you
guessed the target’s location correctly.
When a creature can’t see you, you have advantage on attack rolls
against it. If you are hidden—both unseen and unheard—when you make an
attack, you give away your location when the attack hits or misses.
Best Answer
Yes, they can.
In 5e, any character is able to Hide as soon as they move into an 'obscured' area - even if they were observed during the movement on the way to that area. The only bit that matters is that they end their movement with something substantial breaking line of sight between them and the observer, and have enough remaining actions to Hide.
In the case of the Lightfoot Halfing, they are allowed to treat a space behind a larger creature as 'obscured', hence can move behind such a creature and Hide even if they were observed before / during that action. The only caveat would be that the larger creature must be blocking line of sight to the observer(s) at the time that the Hide action was taken.