I've never encountered this issue, but... perhaps skipping the last part of the dialogue might help? (I think that's spacebar on PC, right?) You might try experimenting with the game's console commands, but I'm not very optimistic that enabling/disabling collision and the like would do anything to help (and it would take a tiny bit of extra work to enable the console in the game. However, having the console enabled and ready never hurts.) If it comes to worst, I don't think you really have to talk to Pallin. He's one of those NPCs that merely give you some insight into the world, if I'm not mistaken. I know it's not as good as getting it fixed, but hopefully it's an isolated issue and not something you're going to see often. Otherwise the last resort would always be fixing your game through Steam/Origin. (If you have any modifications installed, those will be erased.) Especially since you say you'd never experienced this issue before. Well, maybe others here will have better ideas. Crossing my fingers for you.
EDIT: One more idea. Sometimes altering the game's *.ini files (engine, input, config, etc.) can mess things up. If any changes to these have been made, it is possible some of the new information contains an error or maybe the change itself simply doesn't sit well with the game. Sometimes it can also happen that the change is perfectly valid but the game's installation went badly for some reason and... gets more "sensitive" about the altered *.ini which can cause crashes, freezing and I don't know what else. (Had the last one happen. Fixing it through Steam solved the issue.)