Here is the redesign for our little character. Exactly what we predicted, the two characters didn't work out due to the method we were using; the characters didn't resonate with each other, and neither of them really worked in the environment we had picked. (This is what happens when you blue-sky the environment while also developing characters.) As a group, we decided to completely scrap what we had done, and completely remodel the characters.
We formed a character design group to discuss what we liked and disliked about everyone's characters, and then split up to work on the redesigns. I worked on our little guy with Ashley DeMattos, and this is what we ended up with. A lot of elements were taken from my original designs (which the group had picked as a potential design) and we smoothed out a bit here and there.
What we were going for was a little more cliché. We wanted something that the audience would immediately accept, so they can start sympathizing with the character. I based the little guy off of an animal. He's got a cute and expressive face, but his brows and nose should still read as a sort of carved statue (mixing in the hard edges with the organic shape.) We decided to keep the hood, since it really resonated with the guardian-guarded feel of the big guy to little guy. I described the dynamic as a medieval knight and a medieval archer. One is slow, strong, and moves with intent, and the other is quick, perceptive, and energetic.