Whether Greenland or the UK is your answer depends on whether you consider Greenland to be a country or not. It's an interesting one because Greenland is definitely not a territory or a province, which leaves being a country the only thing it could be. For this quiz, we have used the 196-country template of the Countries of the World quiz, but if you include the countries in the Countries 197 to 204 quiz as well, then Greenland would be the answer.
When you said "Excludes uninhabited islands and overseas territories", I thought you meant for the answers, not for the countries looking to match. It took me a long time to notice that overseas territories could be the answer...
I have to say that the Seychelles doesn't seem to be the closest country to Madagascar to me. Mozambique, France (Mayotte and Reunion), Comoros and Mauritius - and possibly even Malawi - all look closer to me. Or am I missing something?