Since my DistantLOD folder wreaks an exceptional amount of stress on my filesystem (and perhaps the game), I figure the best way to remedy this is to make the whole thing disappear. I intend to do this:

- Create a new meshes.bsa containing only \meshes\ and \trees\ from the original BSA.
- Run TES4LodGen.
- Use OBMM to create a BSA (named after a dummy .esp) including the generated \DistantLOD\ folder
- Delete the \DistantLOD\ folder

As far as anyone is aware, do I need to do anything further? Will the game complain if there is no .lod file for a specified grid? AFAIK, TES4LodGen doesn't create ,lod files for grids that have no VWD meshes.

Unfortunately this won't really do anything. The DistantLOD folder is actually very tiny and the game isn't stuttering from trying to read those files. Those files are just records of which other files it should go grab and where it should put them. Also, given that the DistantLOD folder should be regenerated each time a mod is added or removed, BSAifying it would become tedious rather quickly unless you never add or remove mods.

VWD/LOD can be taxing on any Oblivion setup, but there are a few things you can try. You can of course install fewer VWD meshes from any compilations like RAEVWD, and/or lower your distant grid count in the INI to reduce strain. You can PyFFI meshes if you haven't yet, though VWD meshes from RAEVWD at least are already PyFFIed. You can try packing any loose meshes added by mods into your meshes BSA, though be aware that this can make mod management trickier. If stuttering in particular is an issue, you can add Oblivion Stutter Remover if you haven't yet, and/or you can try some more esoteric defragmentation programs like MyDefrag. (I use MyDefrag and would recommend trying it for heavily-modded setups).