I think the brilliant character of the giant Utgard-Loki, with his wry attitude toward that little fellow Thor who “must be bigger than he looks,” is a stand-in for Snorri [Sturluson] himself. They share the same humorous tolerance of the gods. There is very little sense throughout the Edda that these were gods to be feared or worshipped, especially not the childish, naïve, blustering, weak-witted, and fallible Thor who is so easily deluded by Utgard-Loki’s wizardry of words. What god in his right mind would wrestle with a crone named “Old Age”? Or expect his servant-boy to outrun “Thought”?
It also fits with why Snorri wrote the Edda: to teach the 14-year-old king of Norway about Viking poetry. This story has a moral: See how foolish you would look, Snorri is saying to young King Hakon, if you didn’t understand that words can have more than one meaning, or that names can be taken literally? The story of Utgard-loki is, at heart, a story about why poetry matters.