Every character in my campaigns has access to their own language and is able to speak it fluently. Additionally, many characters have access to other languages thanks to high Int scores. The language rules as written are decent enough for both casual gaming and more simulationist gamers with very few changes, but it does require the DM to do a bit of thinking about the way his world is set up. This post will have the simulationist gamers in mind.
Languages are listed under proficiencies. They even have an actual score! As such, a DM could require a character to make a proficiency check to understand "big words" that are outside his or her normal vocabulary(after all, in the real world, not EVERYONE scores high on the vocab parts of the SATs).
On the subject of related languages, I need to offer up some background information. When I got my very first 3 RPG books, one of them was the 1st edition Shadowrun Rulebook(because at age 5, I thought all the pictures looked cool). In said rulebook, there is a skill chart. Your character would take skill x, and he would have skill check penalties based on how closely related other skills were.
Obviously this isn't actually a new idea. creating a language web where one can have both dialects, as well as seeing how languages evolve. I've never actually seen it done in D&D beyond my own campaigns though.
As soon as I get it cleaned up a bit, I'll post at least part of the language chart I use for my campaign
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