It's been a long time since I have done this ... but I seem to remember that the lady in Southern Felwithe wouldn't talk to me either. High elves really don't like half elves.
I don't know for sure if this still works, as it has been years ago, but wolf form should get your faction to indifferent so you can start the turn-ins. You will eventually need to click it off to see how much your faction has raised though. You will appear to be indifferent as long as you are in wolf form.
I also remember stuffing the halfling in West Freeport, Pandos, so full of muffins that he should have exploded. He helps with Clerics of Tunare, Faydarks Champions, King Tearis Thex, and Soldiers of Tunare. Niola Impholder's factions are Faydarks Champions, King Tearis Thex and Keepers of the Art. And of course Arlik Farsight is Keepers of the Art.