How can I reduce timeout for ssh when network is down?
You need to set ServerAliveCountMax as well. The system works so that it after a timeout of "ServerAliveInterval" seconds, it sends a packet and tries for "ServerAliveCountMax" times before timing out completely.

So add:

ServerAliveCountMax 1


to the settings!

I would also recommend taking a look at mosh instead of regular SSH. This will enable you to keep the same connection to the server even between wakes, moves to the conference room, etc.