In my understanding, ringwraiths were once humans. The books portray them as sniffing a lot and trying to pick up a scent. This is especially true in the first part where Frodo departs from Bag End.
Is there any comment or explanation in- or out of universe, as to why the ringwraiths resort to sniffing?
The ringwraiths do not see in the light as humans do, but compensate in other senses, according to Aragorn. During the night at the Weathertop, he has the following exchange with Merry:
‘Can the Riders see?’ asked Merry. ‘I mean, they seem usually to have used their noses rather than their eyes, smelling for us, if smelling is the right word, at least in the daylight. But you made us lie down flat when you saw them down below; and now you talk of being seen, if we move.’
‘I was too careless on the hill-top,’ answered Strider. ‘I was very anxious to find some sign of Gandalf; but it was a mistake for three of us to go up and stand there so long. For the black horses can see, and the Riders can use men and other creatures as spies, as we found at Bree. They themselves do not see the world of light as we do, but our shapes cast shadows in their minds, which only the noon sun destroys; and in the dark they perceive many signs and forms that are hidden from us: then they are most to be feared. And at all times they smell the blood of living things, desiring and hating it. Senses, too, there are other than sight or smell. We can feel their presence – it troubled our hearts, as soon as we came here, and before we saw them; they feel ours more keenly. Also,’ he added, and his voice sank to a whisper, ‘the Ring draws them.’
So the wraiths were probably trying to literally sniff out the living creatures they felt nearby. As we can tell by the episode where a wraith couldn't find Frodo and Sam in their hiding hole on a road from Bag End – they are at the very least not as good as dogs at picking up smells, though; so even if their sense of smell is heightened compared to an average human, it is not by much.
P.S. It is interesting that while Aragorn mostly points out the faults in the wraiths' vision, "life-feel", smell and the "Ring-sense" also seem to be not very reliable - again, referring to the Bag End Nazgûl, it is clear that the wraith feels something of note is close, but it makes only token effort to find out what exactly triggered its senses; and during the night, Nazgûl also seem to rely more on their dark-enhanced vision than on their more exotic senses.
