How hot is hot? Did you measure it or are you just going by "feel"? Most reactors are designed with insulation rated for 180C rise over a 40C ambient, so 220C max. Your reactor could be at 100C and be fine. The industry standard for "too hot to touch" is 60C, so there is a LOT of room between what we perceive as hot and what is actually bad for the equipment.
Also, you say "line reactor" in the title, then discuss motor lead length. On the motor side it is a Load Reactor. On the Line side, anything you do in the VFD settings is totally irrelevant. But the reason I bring it up is because if you purchased a "Line Reactor" for a specific motor HP, then mounted it on the LOAD side, that's a problem. Load Current on a VFD is higher than Line Current, because of the corrected Power Factor, so Line Reactors are sized differently than Load Reactors. A Line Reactor is going to be smaller, usually too small to be used on the Load side.
" We are all here on earth to help others; what on earth the others are here for I don't know." -- W. H. Auden