1) Camera Angle ?
Like others have said, side view seems a bit too limiting and unimpressive. Whether it’s first or third depends both on what the gameplay is and on the quality of the models’ animation. Not to sound mean or assume you can’t do quality work, but it can be very annoying when you have to keep looking at the same dodgy movements all through a game.
3) Weapons, Vehicles, Powerups
I don't know if the engine is capable of having different weapon sets for different characters/teams, but:
Native weapons: Slingshots, Tomahawks, SpooceBows, Live Ammo crossbow
Industrial weapons: Blunderbuss, Big Whammy, SnUzi, BlitzPacker, LungBuster
Native Vehicles: Elum, Wheelchair for Munch, Meetles
Industrial Vehicles: Slig Tanks, Shock Tanks, Recyclers
Powerups: Vendos (For health, speed, higher jumping, invisibility), Spooce
4) Morphs (Yes i want Munch having a morph, I saw an awsome concept fo a Munch Morph and was pissed to find it wasnt in MO) (Abe's = the wilderness god spirit ugly thing)
Sounds good. As an equivalent you could have Sligs turning into Big Bros.
5) Character list (Munch + Abe = essential, who else is gonna be in this mod, Sligs, Slogs, Glukkons) ?
There are a whole host of industrial (Wolvarks, Interns, Vykkers) and native (Grubbs, Steef, Scuba Toads) characters (as well as Clakkerz and Outlaws), but it seems to me that controllable characters have to be able to fight. This rules out Glukkons. And if players control Slogs, would they be given some kind of weaponry?
6) Other such things (Should Munch hop around for travel or be in trusty wheelchair?, Shall I give the bipeds permutations e.g sunglasses, different hairstyles blah blah blah?)
Subtly different skin tones for everyone, different native hairstyles for Mudokons, maybe different headgear machines to help differentiate Gabbits. Sligs can have different kinds of pants, masks, and accessories.
It would help to know what the engine is capable of? Water play? Melee as well as shooting? Flying vehicles? Do you know of any particularly good resources for reading about such things for a mod noob like me? =P