Portrait backgrounds and various emotes and facial expressions are totally doable, seen it in other games (can't remember which off the top of my head).
Also the facial expressions already exist programmed in as we see in the conversation cut scenes.
I personally think the portraits should change depending on condition. If the character is low on health they should be hunched over, maybe grimacing in pain. If they are in good relations with you maybe they are smiling, and if they are at a point of negative relation status they may be frowning.
If there is a storyline aspect that changes their personality like afraid of the dark, or don't like being friendly with goblins or something, they could show the discomfort or aggression.
