Here's a good example of such variation in action:

Those who've run into a dragon in the dungeon before will recognize this as a smaller, wingless version of it. It's an immature dragon. I'll probably make a hatchling dragon that's player-sized.
I've screen capped it while it's using dragon's three-direction fire attack. The immature dragon only does this some of the time, using it as a rare alternative to normal unarmed attacks and single fireball attacks.
The other thing this screenshot shows is that your equipment is now reflected on your character's icon. When I showed the game in person yesterday, my test audience's favorite thing was the character appearance customization, so I decided to go a little further with it. Not only do your handheld items appear on your icon, but the mouths are now animated. But rather than choosing a single mouth and then having it move on a fixed track like the eyes do, you pick up to three mouth icons to create a "mood set" that your character will wibble between.
I think the next step in character customization evolution is going to be the ability to choose a "serious face" to be adopted when in combat or spellcasting, and a "happy face" for when you get something good.