Hmm, I'm not too sure how cropping it would make it look "squished" but I guess probably its because it is still in sketch stage with many lines, hence giving such perception. I'll try my best to polish this.
And yes, for starters, don't start with scratch, especially if you haven't grasp the fft-ish style yet. Copy/paste from existing and reference a lot to get better.
Those are some nice updates! The new judge now has more colours. I'm not really a fan of the chocobo but its cool. And yes, Alphonse has boobs. Also, as Kage said, brighter and shiny armour would be nice.
1-The armor chocobo looks much clean and better than previous attempt. I like it, though I would like to see them in lighter & shiny armour shades.
2-In my opinion, that red on Reno's portrait is bit saturated. Try use Kage's Succubus red. Also, what happened to his brows??
3-For Squall's portrait, try not to use all the shades on his forehead. It's giving the blurry effect. Use only necessary shades to make it look sharp and detailed. Also, there shouldn't be a straight dark line under his chin to his neck.
4-In my opinion, Hero of Light portrait (from Dissidia) need quite some refining to do. I'll leave it to the pros.