I'm not sure what the various dictionaries have to say on the word, but I'd only consider something a "hobby" if it required some form of expertise (i.e., insider knowledge), an active community of like-minded people, a significant cash investment, no expectation of profit or return-on-investment, and probably some supporting industry (perhaps a cottage industry). Thus, things get classified as hobbies if you can go to a store somewhere and buy materials produced specially for that activity. Take for instance the big arts and crafts sections of Wal-Mart.

Is watching TV or pro sports a hobby? I think it can be, but only if people go beyond "just' watching and really got into it. If someone was into a show like "Star Trek," for instance, to the point that they were not only watching the show but were active on Star Trek-related forums and wikis, experts at Star Trek trivia, attended conventions, buying memorabilia/books, writing fan fic, etc., I'd call that a hobby. Same for "sports nuts" who really get into a sport/team and make that a big part of their life. If you know all the players' names on a team and can talk endlessly about their stats or whatever, I think you've passed into hobby land.

Likewise, I'd distinguish "hobbies" from "arts and crafts." Arts and crafts *are* hobbies, but not all hobbies are arts and crafts.