I do like LGNPC, but it is best enjoyed when you're not too concerned about instances of poor writing like the ones quoted above. To me, the entire Redoran story that LGNPC gives you, for instance, is more important than some punctuation errors in Seyda Neen (vanilla Morrowind also has quite a few typos, by the way). But I can sympathise with the idea that such errors remove a lot of immersion.
I don't think LGNPC makes significant changes to the way you interact with characters; it just adds more variety to that. With or without LGNPC, Morrowind will always be a game where you don't really have
dialogue choices as such, except for a few exceptions where they help out with quests. LGNPC adds a few more instances of this and quite a bunch of quests, but it mainly just gives unique responses to all the topics in the list. Most of them are along the lines of "I'm just a peasant, how do you expect me to know everything about Daedric artifacts?" I can imagine that it would be very easy and tempting for the makers of LGNPC to make every character someone's long-lost son and add a quest with disproportional rewards to every single one of them, but I didn't see a lot of that.
That some of LGNPC is poorly-written is something that cannot be denied, but the same can be said for Morrowind in general at times. I think it's a good mod altogether.
Some criticisms, though:
I can understand why the guy who wrote LGNPC Seyda Neen answers his critics by pointing to the context and to the fixing of the mod, but I do absolutely think that LGNPC:SN is the worst one of the lot. At one point in the mod, you can help an adventurer fall in love with a village girl. One of them gives you a love letter for the other, and when you try to read it, it says: "This is a secret love note that you should not be reading you cad!" Derp.
Of course, Seyda Neen isn't very important, but one problem with a lot of LGNPC is that a lot of things you do just evidently
don't matter. While I love all of the Redoran-related LGNPC, it's really a shame that everything is basically linear and predetermined. Everyone knows that nobody will ever give a shit if you bring potions and equipment to Marandus, that they aren't actually having an epic battle against the Sixth House while you are clearing out a cave, etc. And when you side with Bolvyn Venim against them, you just get expelled (I think). Of course, it would be strange to support the people who hate outlanders, and it is in character for Venim to screw you over like that, but it means that there is no real choice involved in helping out Sodres Nerethi. You only do it because that's the only way to get the plot along. Bear in mind that LGNPC promises:
PAX Redoran seeks to have the entire House Redoran experience be more interesting and less generic, making the House seem more like a House of honorable warriors that is suffering a decline of their honor and fortunes. The PC can begin to reverse that decline or increase it by their actions.
You can hardly do anything about that. Sure, you can
tell characters to start rebuilding the walls of Ald-ruhn, and they will
tell you that this will be done eventually, but you never really get anything to show for it. The Ald-ruhn mod promises that you can "search through the manor district for notes, letters, and threats, all written by our members, adding new depth to the storylines of the characters occupying the manor district, and triggering new quests", but how often does that actually happen?
A lot of this is related to the nature of Morrowind itself, of course.