In both the 3.0 and the 3.5 SRD's, a grapple attack is listed as an action which DOES provoke an AoO. Since most creatures who grapple or have Snatch or Improved Grab are large or huge or bigger, and have reach, it would seem logical to say that creatures with reach who attempt to grapple do NOT provoke an AoO - if that were true.
Instead, the rules simply say that starting a grapple provokes an AoO. Period.
The reason it provokes an AoO is because you aren't just attacking someone. You are literally wrapping one part of yourself around them. Whether that is your mouth, your tentacle, your hand or whatever appendage you use, that means that some part of you is within reach. I'm sorry, it just doesn't make any sense to say that a dragon with 10' of reach can put his mouth around you but never be threatened by your weapon if you have Close Quarters Fighting. That's why it's called CLOSE Quarters Fighting.
And in the description of the Feat in Sword and Fist, it says, "Further, you are entitled to make an attack of opportunity even if the attacking creature has the improved grab ability."
Period. No qualifiers.
So yes, CQF gives you an AoO against creatures attempting to engage you in grappling ... even if that creature has reach.