Ive no doubt dealt with this one before and fixed it, but as its some months ago I was doing NPC's I seem to be unable to get past this obstacle.

1. I create merchant chest outdoors, give it unique ref and hide it under the ground.
2. I link persistent ref NPC and give him a place to stand from 0700-1400 where he will then sell things.. so far so good, he stands, he sells.

3. I set a sweep up package with all the right things done for 1400 to 1600 and a sleep package to a persistent ref bed at 2200-0700

so he goes and he sells. Then at 1400 he runs up to me and stands there like an idiot. He pursues me everywhere. This continues until 0700 when he goes back to selling. Its almost as if he is trying to throw me out of his shop but doesnt know the shop is an exterior cell. I have all of the lock up, unlock stuff unchecked in the selling AI.

Help

I don't know the cause, but I think the Fighters Guild Porters follow you around because of this too. I have an exterior shop aswell, and I don't have these problems because I made my merchant sits on a chair instead of standing up. Perhaps experiment with a chair and check the results?

I think the important part is the 'Continue if PC near' flag. If it is checked the package will run as long as the player is near and the next one will not trigger. Normally this is useful so shops stay open until the player leaves the interior. In exteriors it doesn't work very well for obvious reasons - the NPC will follow the player all the time and keep staying in the loaded area. The only way to escape (and let the NPC trigger his next package) would be to get into an interior or fast travel. If you have that flag set remove it.

Ok, update. I have sorted out the going away and going to bed part, he will do that now. I had like a buffoon missed out the time of the sleep package. However now he follows me around at the following;

1400 merchant package ends.
1400 package to equip and use broomlower01 at an x marker near location. He has the broom in his inventory.
at this time he runs up to me and follows me. This continues until 2200 when he goes to bed.

You were absolutely correct, its the continue when player near that needs to be unchecked.

Now, my next problem is to get the twit to get out of bed without me having to wait for one hour to trigger his AI.

Just an idea, but play around with the 'Must Complete' flag. Also, you could try reordering the packages in order of time if you haven't already.
The only reason I can think of a player running up to you and following you is if A) you're in a cell they own when they're about to leave it, or B) it's a Follow Package. In the first instance, they shout loads of stuff at you anyhow, so you'd be able to tell if it was that straight off. If they're not saying anything, it's probably something to do with flags or a package somewhere that tells it to. I hope that helped, but I imagine not!

EDIT I can't think of a way to refresh a package without scripting or loading into a new cell or reloading the on you're in (through waiting/sleeping). Doesn't seem to be any obvious way in the CS! However, I thought all packages updated on the dot of every hour anyhow? Could be wrong, but I thought they did. Wouldn't make sense if they didn't!