Got another GMST to try, iGreetDistanceMultiplier, from MSFD (also a http://planetelderscrolls.gamespy.com/View.php?view=Mods.Detail&id=6748 using this) . It should not be important if hello is 0, but with Morrowind you can never say never...
Changing the Hello setting
Get/Mod/SetHello
Changing this changes it for ALL references of the Actor. Some info from the helpfile: Hello
equates to the distance at which the Actor will stop, face the PC and say hello. The setting
(which defaults to 30) is multiplied by the game setting, iGreetDistanceMultiplier, which
defaults to 7. Thus, a setting of 30 yields a hello distance of 210 (just under 10 feet).
P.S. not important, but in my Morrowind.esm iGreetDistanceMultiplier defaults to 6, maybe a MSFD typo or a different Morrowind version.