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- If Hoopz chooses to move, does it cost him Action points or anything similar? Does moving limit how much he can fire?

Both 'yes' and 'don´t know yet' actually. Initially, that was the plan.
The combat prototype worked like this: Both weapons and the players have 0 to 100 "action points". Certain actions consume some amount of points (ex.: moving costs 30 points, normal attack costs 60 points, a weapon skill costs 100 points, etc).

On the prototype that worked pretty nice, but when porting that code to B2, I changed my mind because of the ammo costs. Managing both the amount of ammo and action points felt weird... Would a "triple shot" skill cost 90 action points and 12 bullets? It seemed too complex using the current system / gameplay loop.

Having said that, Hoopz still have its own action points that he can use to move, use items (???) and defend. Hoopz action point would affect the speed that the weapons action point would increase (ex.: Hoopz AP is at 50, so the weapon AP would increase at 0.5x speed).

- Also, does Hoopz get the chance to evade enemy fire / strikes in any way?

Yup. From the start, I was think that would be pretty cool for the player to wait an enemy attack, dodge the attack and shoot the enemy at a close range, all using menus to do it. The action points and "Active" battle system was made to do just that.

- Have you thought about "friendly" or "neutral" NPCs participating in battle?

I haven't thought of that, but I think that the current battle system can support that.

- Nothing stops you from having a "party" of people that join you throughout the adventure. Maybe they give passive benefits/skills for use? Or maybe you can deploy them to fight alongside you once a battle starts?

The main issue of having a party is the writing and sprite work necessary to make good characters. Those aren't my strong suits lol.
Between having no party members and having some that say nothing interesting and has bad graphic/sprites, I prefer having no party members. Manly, that why I´m trying so much to use only original assets.

- If a fight starts, do you battle exactly where it started (for example: a cramped corner, or an alleyway), or are you transported to a bigger fictional area to do the battle? The demo you showed seems like a good size for fighting.

You always stays in the same map, but Hoopz and the enemies can move to a specific place before the fight. In the Demo, for example, the enemies would move to the '0' and '1' spot, while Hoopz  moves to the '2' spot.

With this, we have some control on how battles would look at the start.