So after I rescued Baldor from his captors, I was supposed to meet him back in the Skaal Village to talk to him and wrap things up, but when I approach him, the dialogue won't activate. He just repeats a few stock phrases and continues blacksmithing with the arrow over his head, thereby preventing me from being able to complete this quest. The same thing happens for another side quest when I try to return to Fanari to tell her that the bandit is dead. Is the Skaal Village a glitchy area? Has anyone else run into this problem?

You have to finish the main quest first, then he gives the options, and also becomes a mrechant.