Remove Interact Key
 

I know how to stop an interaction from occurring when the button is pressed, but I am looking for a way to stop the button from ever appearing, if possible.

I tried finding it with Zgoo mouse but ran into the unhelpful situation where when you free the mouse the reticle disappears. Luckily I saw the reticle container.

ZO_ReticleContainer:SetHidden(true)

That does appear to do the trick. I was trying to use it with EVENT_RETICLE_TARGET_CHANGED to check for a blacklisted target and then hide it with that, but it only half works. Sometimes it fails to disable it or it's extremely slow to re-enable it on something not blacklisted.

You probably recall what request it was for, but: http://www.esoui.com/downloads/info1623-NoInteract.html

Am I going about it the wrong way?

Did you check the addon "No Thank You" already? There is an option to hide the interaction stuff for insects.
If you enable it you won#t get the interaction shown in the world if you are near an insect you could collect.

Combat reticle has an option to hide it as well.

I used the way No, Thank You! did it and so far it is working perfectly for my use case.