Lol ok, he's not actually a 'hero' npc (the type with % health), I didn't realise. That's what's causing your various problems. He can probably be killed in battle too, so be careful
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I'll try switching his flags with the save-editor, probably result in bugs galore but I want to see what happens.
Edit: yeah it crashes it. he's stuck as a normal dude.
Use Morgh's editor to give him the equipment you want him to have, then use the save-editor to change his flags to this: 267387904. That's the best you can do afaik. Maybe someone else knows how to turn him into a hero-type npc.