Yes, in general all AI empires should tend less towards declaring war. That's not to say it makes them friendly , it just means they tend to remain neutral unless something changes their stance. The biggest factor by far is shared borders -- it's an ongoing, negative weight. You will definitely see a lot less of random wardec chains.

does this make passive AI more friendly in general?

By default there's a *lot* of little ways the AI can decide to not like someone, and it can add up *fast*. It certainly doesn't help that, by default, the relationship has a "bias" towards a standing of 0, which is neutral. Checking the comments within the script I've added (search for "Havear" to see them), it looks like I've primarily rebalanced these checks so if the AI hates you, there's a *reason*. Are you beating the AI in points? It wants to win, so doesn't like you. Border disputes? If the AI thinks it can't win the war it'll simmer until something else unbalances this.
This doesn't make AI *friendly* in any manner, but it does mitigate the AI's bad habit of declaring war on anything and everything, and also means that the goodwill from gifting isn't wiped out in a few ticks.

I believe AI can negotiate with each other in the engine -- I've certainly seen nothing in the script to say otherwise.
Every diplomatic tick the AI makes its way down a list of players. Each player is then checked to see if they've recently done some action (like donating), whether they share borders with the AI doing the thinking, and how the AI and this player match up with regards to military strength and overall points. Each of these items adjust the "goal" for the AI to reach with the player, and then at the end of the diplomatic thinking adjusts the standing towards the goal slightly.

Surprised nobody has commented on this. Thanks for the mod.

Is the per-tick diplomatic standing automatic or is it based on having other treaties like trade? Does AI ally each other now with this mod?