I decided to do a quick search on the original lore in response to this thread. What I found was interesting.
Turns out, hobgoblins were originally portrayed as friendly, if somewhat mischievous, creatures in English folklore as opposed to the standard goblins (also from English folklore) which were universally mean-spirited. Not always evil exactly, but definitely not a good thing to have around.
The term "hob" in hobgoblin actually means "elf." So, it literally means elf-goblin. Also, in Shakespear's original writing notes, Puck from "A Mid Summer Night's Dream" was said to be a hobgoblin.
EDIT: As always, it was Dungeons and Dragons that dramatically shifted the lore into what we know it as today. In D&D, hobgoblins were an entirely separate species from goblins, they were much bigger and stronger than goblins usually being man-sized with big burly muscles as opposed to goblins which were short little nasty child-size things with wiry builds. But, they were both portrayed as monstrous.
Hobgoblins and regular goblins would often ally together rather easily, mostly because goblins would be naturally subservient to hobgoblins and follow all their orders.