If I have transaction A and wish to verify that it is in the block, and I also have the hash of transaction B and the hash of the hashes of A and B, then can't I just hash A and then see if what I get by hashing A's hash and B's hash is equal to what is in the Merkle tree? Why do I have go all the way to the root?
If you have
A, HB and HAB you can obviously check whether
A fits. As Jestin noted this is essentially a full Merkle tree with two leaves.
However, as a thin client, you only have readily available the Merkle root (which is in the block header) and get told about
A. The intermediate levels of the Merkle tree are not provided, therefore, to calculate them, you'd need the block's complete set of transactions.
Image via Mastering Bitcoin
So, for a thin client, we calculate the Merkle branch instead. For the Merkle branch, we just need the transaction's position in the block's transaction list and the hashing partners at each level, instead of the complete set of transactions. A Merkle branch is impractical to fake because it would require finding of a hash collision (which is not doable, or mining wouldn't work). So by going up the tree and combining our result with the respective hashing partner at each level, we finally get the Merkle root. Thus we can prove membership of the transaction in the block.
In the example image, you only need to provide the blue information to link HK to the Merkle root, whereas checking the whole Merkle tree would require all transactions from A to P and the Merkle root.
What you are proposing is essentially a Merkle tree with 2 transactions. The hash of the hashes is the Merkle root, and the hash of B is the rest of the Merkle path. You are going all the way to the root.
When you scale this up, you can provide the next highest node in the tree...but what verifies that it belongs in the tree? You'll need to provide the hashes all the way up in order to verify, because it's the Merkle root that is hashed into the proof of work algorithm.
Merkle trees are used extensively by SPV nodes. SPV nodes don’t have all transactions and do not download full blocks, just block headers. In order to verify that a transaction is included in a block, without having to download all the transactions in the block, they use an authentication path, or a merkle path. To understand why we need authentication path, you need to understand how Merkle trees work.
A merkle path is used to prove inclusion of a data element. A node can prove that a transaction K is included in the block by producing a merkle path that is only four 32-byte hashes long (128 bytes total). The path consists of the four hashes (shown with a shaded background in A merkle path used to prove inclusion of a data element) HL, HIJ, HMNOP, and HABCDEFGH. With those four hashes provided as an authentication path, any node can prove that HK (with a black background at the bottom of the diagram) is included in the merkle root by computing four additional pair-wise hashes HKL, HIJKL, HIJKLMNOP, and the merkle tree root (outlined in a dashed line in the pic below)