I love the feeling in this image of the pressure he's under. He's standing precariously on a rooftop while the entire town is up in flames behind him, aiming at a moving dragon, while a thrush is trying to talk to him to explain where he needs to aim.
Note that the quiver is empty, so this is his last shot. In a way, the entire future of Middle Earth hangs on this moment. If Smaug had killed Bard here, he probably would have gone back and killed Bilbo and the dwarves. The ring would have ended up in the treasure hoard and would presumably have eventually been retrieved by Sauron.
Could Smaug have used the ring? I think it is able to change its size. Don't know if it could increase that big. But, a dragon is already nearly invincible. Imagine having to deal with an invisible one.
