Hey - I would remove them. It's your baby but that's my 2cents. I think the 2D backgrounds do a better job of getting you in the groove of the fight. Maybe work on the 2D and add some condition changes based on who wins combat a la KOF.
As for the portraits maybe cutting specific art circle that are the size of the health bar face for those screens would remedy it?
I am running a retro tourny tomorrow @ one of my kid's schools. She is bringing this game on her Linux laptop to play on the big screen with her classmates. Thought you should know.