Is it possible to get BSP to hide in the distance? You can select the BSP brush and give it a max distance but it doesn't work. Is my only option to turn it into a static mesh? If so, I'm having trouble with that, I'm creating a ruined building and even when selecting all of the brushes (the brushes that remove geometry) it only saves it as one big brush and takes no notice of the edited geometry.
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Actually the correct term for BSP-Brush would be CSG-Brush, as the operation to form one mesh out of those brushes is called Constructive Solid Geometry, but the Term BSP settled with the people instead.
If you need more info, google or ask wikipedia for the terms BSP (Binary Space Partitioning) and CSG (Constructive Solid Geometry), you should then understand why BSP is a bad decision for vast environments performance wise and if you want to dive into other problems, google BSP-hole just for fun
To conclude: you are supposed to use Static Meshes to build your levels. Max Draw Distance and stuff like that will not have an influence on BSP because it will be one single mesh in the end and the culling of parts of that mesh will be decided by another process than those that cull Static Meshes and alike.