This was kinda a bad choice, but the best way to reset is to use the reputation setting command to get yours positive again. I'd like to say that I could tell you the syntex for said command, but I can't.

Go into creative mode and right-click on a hostile NPC, click on Edit Stats. Then set Reputation Friendly to 0.

I've found an inquisition ship on my server, and my nephew started attacking them before we knew they were friendly, now they're always hostile towards us even after I went into creative and made sure they were all on reputation friendly at 0. They have reputation on kill set at 10, would that cause them to kill us on sight?

Yeah that's intentional. You're an enemy of the inquisition now. You can team up with the Witches or you can improve your reputation with the Inquisition. If you know how to make NPCs you can make one that that gives you reputation points. Or if you want to improve your reputation without cheating there is a red Triton underwater house and a Triton there will sell you reputation points.