I was personally going to use a hidden hud like that as well. Not quite the same, but like if you are at full health, it would be off the screen and would only show health left, lives would only show up when you died or paused, etc. It's a good idea to save space. You can also potentially use sound to indicated low health, or change out some of the art like Mario does.
It's looking great though. Can't wait to see some enemies in place.
(I also want to say, your profile pic is pretty much my games character XD)