I am working on getting a silenced 10mm pistol that could kill with a single headshot, which I have achieved by upping the critical damage.
To balance the weapon a bit I have reduced the chance for a critical hit but would also like to reduce the range of the gun, so that one would have to sneak really close to the intended target.

Is there a way to reduce the range?

Its the projectile that has a range setting. The range setting on the weapon page is used by Actors to determine how close/far from the target they should be in order to use the weapon. You just need to make a copy of the projectile your weapon uses, then adjust the range setting on the copy, then set your weapon to use that projectile. You could also increase the spread ans min spread to make the weapon very in-accurate at long range.

Thanks, this works perfectly, but is there a way to make the VATS percentage to show up as zero when the enemy that is targeted is out of range for the projectile?

Try lowering the 'Base VATS Chance to Hit' on the weapon page for your weapon. If you set it to 0, your VATS accuracy should deminish quite a bit.

Also, Take a look at the Commando perk. You could make a hidden perk that gets added to the player when equipping the weapon and gets removed when unequiping it that greatly lowers the VATS chance to hit as well - If the above is not enough.

Are you sure about this? I've always understood the 'Base VATS chance to hit' to be the chance the player hits the weapon in VATS when its held by an enemy - http://geck.gamesas.com/index.php/Weapons#Game_Data_Tab

I cannot truly understand what is wanted by decreasing the range of a weapon.

Range like, you have no hit chance when it's beyond a certain range, as seen in vats?

or, the bullet is really just not going to go that far no matter what you do, including out of vats?

There are times when an enemy is too far away for me to target in VATS so I shoot the weapon out-of-vats and make kills with it.

So, there's a couple things to think about.

You're right, my bad.

This.

I have reduced the range of the bullet, but when I target an enemy in VATS the percentage to hit still appears the same as the ordinary projectile (even though the new projectile can't reach the target).

Great idea, I will look into it.