I'm having a difficult time wading through all the posts so I'm hoping I can just get a straight answer:

The copy of Morrowind on GOG, does it include the combat mod people made years ago so you don't swing and miss from point blank range?

No. It doesn't matter where you buy Morrowind, it will not include third party mods.

However, the GOG version is fully compatible with mods altering the vanilla combat. You just have to install them yourself like any other mods.

I'm not using them myself, as I think there is nothing wrong with the vanilla combat (i.e. you are supposed to miss a lot at low level), but I believe the one you might want is this one.

For a complete overhaul of the combat system (not just hit chance) you can try this one instead.