Liking the colours a lot.
Depending on the environment and other characters the proportions could be fine! The "problem" is that if relaxed, his hands would touch the ground. So, perhaps you should make them a little smaller? You could also add a teeny bit of length to the legs (a pixel, two at most), but that's not necessary, I think this stub-legged style could work well.

When working in indexed/palette mode, I would expect it to be index painting, where the colours "snap" to the closest colour that is in the palette. This would apply not just to layer opacity, but "fuzzy" tools like gradients, soft brushes, etc.

There are tutorials out there for setting up Photoshop for pixel art. There are a few steps you have to do to make sure your tools aren't anti-aliased and so on.

Other than that, just study reality and others' work, and experiment! The best tutorials don't teach you how to make specific tiles, instead they help you understand what it is you're trying to do. There are as many ways to make each kind of tile as there are artists, and if you only learn from tutorials that tell you what to do, you'll only end up copying other artists instead of making something that works for your project.

This tutorial is a nice starting point, but make sure you read the whole thing, not just the section on tiles. You should also make sure you don't limit your learning to just pixel art - look at real rocks and grass, so that you can develop a better feeling for the things you'll eventually be depicting, so you know when you're doing it well, and what to do when you're not.

The shadow is right if the light source is larger than the object. When in doubt, you can always calculate it, just like you calculated the perspective in the bottom right drawing. Shadows are affected by perspective too.