I understand the incredible amount of work it asks unfortunately.

So perhaps just display characters with a good alpha fading when they are at a certain far distance ?

Or do a good game management to have only some maximum of ennemies per zo,e or around the player at any time ?
If you have already 3 ennemies around ,don't make some others coming from far away !

----------

I think you can do vertex welding for LOD very easily in fact
(perhaps i'm wrong ??) :
- Make your high poly LOD 1 with textures animation
in FBX format
- Make LOD 2 : just weld vertices clerverly (and that are
some approximative same Weight for animation)
The texture will normaly be OK !
Redimension texture size
And save to FBX
- Same way for LOD 3

Import in MED each FBX model and name it with the good extension for each LOD !

Perhaps im' wrong ? I'll have to try !
(I just tried static models !)