Most people absolutely want to be recognized, particularly if they are regulars. I try to learn their names and favorite songs. Of course it all depends on the venue. Big dance clubs like DNJ plays are necessarily different.
Many of my customers (fans, clients) would be insulted if I didn't talk to them.
Still, you can't overdo it. You are primarily there to play music.
The correct combination comes with experience and then you don't always get it right.
DonM