I have long considered him to break the fourth wall, but I lean toward Tom being an oblique author self-insertion, irrespective of Tolkien’s claim to not be embodied within his works.
My default assumption when I read any of the many "middle-earth x is not real world y" statements Tolkien has been provoked to make is that it's either a lie or an honest mistake. I believe that he was perfectly capable of writing about the war he served in while firmly believing that he was not.
The primary function/role I'd ascribe to Bombadil is almost the same same as that of the hobbits: the common man who'd like nothing more than not being bothered with The Great Game. Just with the twist that unlike the hobbits, he actually has the means to make that a reality. Everything else, the age, the powers, the mystery, it's first of all a requirement to make that role possible in Tolkien's world. That it adds depth, mystery, hn frontpage posts, that's all just a nice side effect.
