I've opted for a stretchy spine which is going to make for some great stretch and squash with this character. Also decided blend shapes were the way to go, and will hopefully save some time in my actual animation.
Fun with morph shapes... I try not to giggle while modelling the faces :p
New stretchy spine using a spline IK, and linking the clusters from the curve to three simple controllers. Using a multiply/divide node, the joints readjust/rescale their position along the curve as you move the controls.
