To continue the previous post:
Here the explanation of the use of Dative in the sentence

> 2. ok hló við: "Litlu verðr Vöggr feginn."

The way I understand this myself, is by saying that
the explicit Dative ending -u in litlu, makes the
preposition that is needed in other languages that
don't have explicit Dative endings, unnecessary.
Hence, in order to translate to English one needs
to ADD a preposition in front of litlu. In this case
the relevant English preposition is "by". The proper
English translation then is

[By] little Vøgger becomes glad.

The grammatical details of the sentence are:
Litlu = neuter singular Dative of the adjective 'lítill' = small.
Vöggr = masculine Name of Person in the singulare Nominative case.
verðr = 3rd person singular Præsens Indicative of the verb 'verða' =
to become.
feginn = maculine singular Nominative of the adjective 'feginn' =
glad.

Here are some variants of the several translations that I found
in the literature:

Ved lidet bliver Vøgger fornøiet.
By little Vøgger becomes happy.
Vöggr becomes glad over little.
Vöggr is made glad by a trifle.
A trifle gladdens Vöggr.
Über eine kleine Gabe wird Vögg froh.
A small gift gladdens Vögg.

Greets,
Xigung