Thanks for your comments!
Skipping to the end of dialogs will definitely be a feature.
Currently I am storing the dialog for each NPC in a JSON file, with a list of sentences (not words) and an associated language string. I wanted to keep the dialog in an easy to write and modify format so that its easy to add dialog and easy to eventually localize it.
I then have a language parser system that will split the dialog strings into tokens and check the language manager system to see if the player knows the word in the given language. The language manager has lists of known words for each language. If not the word is replaced with the obfuscation characters and then built back into the full sentence. Then its pushed out to get displayed and animated.
Other than the language learning mechanic, the dialog is quite static right now, there is no branching or anything like that. This will evolve over time though as more content and more complicated quests and dialog get added to the game.