I tried 600x600 and 600x700 i get what you mean by a box. It feels weird. I suggest we do 600x800 the closest thing to normal.
here's my styk and my idea for a health bar. Obviously not the finished version, just something quick i made for an example.
You might have noticed i set my guy directly on the line. I think we should do this to keep the 2d video game feel.
I honestly feel bad for making such a horrible anim...

So my idea for the icons would be a circle with our guys in it, maybe we could just make our own icons, however we want to.
The health bar would extend out, and a single line fills it up. since its just a line segement, you can use the subselect to easily increase its length. I suppose we could put a number or small cricles above the icon, or in the health bar to symbolize lives. when the guy dies, the health bar tucks away and the icon switches with the next styk in the team. which will be the circle under it. when the next guy enters, they enter in from the side with their health bar.
If we use this idea, i suppose i could make the bar, though i think Gm's better at styk making, and I'll send the circle out for download so you guys can design your own icons.