This is a problem I've too noticed at large gatherings such as events. Part of me agrees with you that there should be a way to adjust your hearing radius, much like you can adjust your viewing distance in camera options. Then again, part of me says that it speaks to the caliber of your RP how you're character reacts to such situations. If you become overwhelmed with the amount of chatter in an area, perhaps your character does to, and will want to withdraw to a quieter location. Also, wouldn't it be more realistic for your character to lean into a conversation if trying to speak to someone in a large crowd, such as the following hypothetical chat log:
random person A: Blah Blah Blah Blah
random person B: Yeah? well blah blah blah blah
Menki: Did you hear about the new museum?
random person C: Blah Blah Blah
random person B: Nuh uh, blah blah blah!
Fenki leans in closer to hear Menki better,"There's beer where I can see 'em?"
random person A: HAHAHAHAHA! BLAH!
again, I think RP should be considered, and players should ignore the conversation taking place on the other side of the crowd, because it would be unrealistic for anyone to discern what was being said. But, the fact that conversation to us is represented as chat in a text field, such a feature would reduce the clutter and make the RP easier.
also, perhaps different races should have different default hearing radii. Enki are said to have a heightened sense of hearing, and I think other races too. Shouldn't their hearing radius reflect this?
I'm half and half on this one. I think it's open for some healthy discussion though.