Has any thought been given to how far speech tends to travel? On a quiet day you can hear someone speaking at a good distance, and the speech distance in H&H seems a little short. Even if you can't understand what they're saying, you can still hear them saying -something-. My thought was to extend the distance speech can be 'heard' ingame clearly, then add about, what is it, half that as a 'You hear (name if you know them/'someone' if you don't) speaking.', maybe with a tiny speech bubble popping up like the party guide arrow showing which way it came from.
EDIT: Sorry! I forgot the other half of this - it would necessitate a Whispering command of some sort so that you could talk more quietly with people nearby.