I was thinking Fredo felt "close" to Moe Green because he was shippped off to Vegas and Moe was supposed to look after him. He was pretty well shut out of the Corleone family business so he doesn't know much of what's going on there. In Moe Green he saw power and money with all the flashy girls and the Corleone family was simple.
Maybe because he didn't really know how powerful the Corleones were he felt Michael overstepped the line when talking about buying out Moe. And maybe Moe was the only one to hang out with him - I mean how long had he been in Vegas and when was the last time someone from the Corleone family went to visit him? But in the end, no Fredo was a dummy - why couldn't he remember to never take sides against the family