Gonna simultaneously distinguish D&D-kobolds from their folkloric namesakes (which is really just the German word for a sort of household spirit) and connect them back to their namesakes by rechristening them Smaltlings or some shit.
See, the first time I was exposed to the D&D-bold I was immediately fond of how their species name wasn't just derived from a non-anthro equivalent, it felt natural somehow. This isn't just "a dragon but humanoid", it's some weird species of sophont related to dragons, but distinct enough that they're not called dragons. Like, even for closely related species irl... if they're familiar enough within the history of the language being spoken, they often have totally distinct names. We don't call dogs "house wolves" or wolves "forest dogs"; a "bee" and a "wasp" are distinct words even though they're recognizably similar creatures. What English speakers call the "raccoon dog" is not referred to by such compound words in the places where it's common. If you have little weird kinda-draconic kinda-canine kinda-ratlike folk running around as a common and longstanding part of a setting, why would they be called "dragonfolk" or anything similar - especially if they have some noteworthy differences from other "dragons" beyond their humanoid shape, and totally different cultural connotations?
D&D-kobolds were initially described as reddish-brown, though now they're depicted as coming in basically any color. But I think there's a strong argument to make them blue, based on the connection between kobold goblins and cobalt pigment... as noted on Wikipedia's article for the concept of gnomes.
The name of the element cobalt descends from kobelt, a 16th century German miners' term for unwanted ore (cobalt-zinc ore, or possibly the noxious cobaltite and smaltite), related as mischief perpetrated by the gnome Kobel[a] (cf. § cobalt ore). This Kobel is a synonym of Bergmännlein, technically not the same as kobold, but there is confusion or conflation between them.
[...]
Agricola knew of certain noxious unwanted ores the German miners called kobelt, though he generally referred to it by the Greek term, cadmia. This cadmia/kobelt appears to have denoted a cobalt–zinc ore, but Agricola ascribes to it corrosive dangers to the miners' feet, and it is noted that smaltite, a cobalt and nickel arsenide mixture, presents corrosive properties. This ore, which defied being smelted by the metallurgy of that time, may also have been cobaltite, composed of cobalt, arsenic, and sulfur.[94]
The presence of this nuisance ore kobelt was blamed on the similar-sounding kobel mine spirits, as Mathesius noted in his preaching. The inferred etymology of kobelt deriving from kobel, which Mathesius does not quite elocute, was explicitly articulated by Johannes Beckmann in Beiträge zur Geschichte der Erfindungen (translated into English as The History of Inventions, discoveries and origins, 1797).
The kobel spirit possibly the namesake of the ore is characterized as a "gnome or a goblin" by science writer Philip Ball. However, 20th century dictionaries had suggested derivation from Kobold, for example, Webster's in 1911 which did not distinguish kobel from Kobold and lumped them together, and the OED which conjectured that the ore kobolt and the spirit kobolt/Kobold was the same word. An alternative etymology deriving kobolt ore from Kübel, a type of bucket mentioned by Agricola, has been suggested by Karl Müller-Fraureuth. Peter Wothers suggests that cobalt could derive (without connection to Agricola) from cobathia for noxious smoke.
The smaltling, I think, should be a creature associated with elemental earth, as a descendant of mine-spirits like the gnome and dwarf are. It should be associated with elemental fire, also - for the way that cobalt ore is processed into pigment is traditionally through heat, and there is a subtype of the folkloric kobold that is firey and apparent kin to dragons. Damage types that it might resist, and that its magic leans best towards - fire, poison, and acid, for the noxious fumes and corrosive dangers associated with the kobelt ore.
Much else of their lore shall remain similar. Small and weak for "humanoids," towards the bottom of the cavern food chains; cleverer reptilian equivalents to prarie dogs or meerkats, in many ways, depending on numbers and cunning to survive depredation. Like to form symbiotic relationships with a large and powerful draconic protector, but can survive without one. Oddly hybrid-like, to the draconic clade as the strangeness of the platypus is to mammalkind.
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