[freebeard]

Depending on the topography, leveling the site (cut and fill) may produce an excess of fill dirt usable for walls.

A rammed earth floor would reduce whatever level results by another foot or so. You can double-dig the floor and make it twice the thickness.

I don't know if you follow the construction of the Austin Gigafactory, but what they did there was, having marginal subsoil conditions, they dug dry wells and back filled them with crushed rock. This was compacted in lifts so the poured footings for their columns rested on a solid cylinder of rock. Then they threw up the upper floor and roof framing, and finally came back in to finish the slab on grade.

You could follow the same plan for a Hobbit house. Multi-story, ground level entrances inside a mound of living roof.