Emblem Radar Ready
1+2: I don't think you did. You haven't addressed the issue of missing sprite frames. Like for example, you're going to need those overhead and under foot sprites for when the player on the loop is wall running. The *3*7 frames can only really cover a head on look from the side. You would still need more sprite frames to cover the rest of the angles, and by that point you might as well make the player visible from above.1 and 2: I had multiplayer in mind when writing my post. With 1, you would sometimes have situations where it looks like a character is facing you when they are actually just above/below you, whereas with 2 the flat nature of the sprites could be abused to render players invisible to each other when seen from above/below, landing cheap shots in match for example.
3. Not necessarily, but it would definitely look odd to have characters suddenly spinning for a moment as they run past you from above/below when they aren't actually spinning, and it would be especially jarring for characters like Espio and Blaze.
4. All you did here is reiterate the point I already made, so I don't really see the point to it's inclusion in your reply at all.
take a look at this image for what would be needed:
This Sprite Sheet of Knuckles from X-Treme would also serve as a good reference for how many sprites would be needed just for walking, and even then, this might not actually have enough.
3: you did mention that the spin frames would look odd, and Jarring to have them look like they're spinning when they're not, but that's why you don't use those frames outside of their proper context.