In fact your guys can be killed by friendly fire. For previous incarnations it also can be a grenade you are drawing somewhere they will move to.
You're right about the lack of feedback, there are quite a few things I had to cut in that regard (obviously sound, visual feedback on hit/block/reflect/projectile-strength, battle-timer/boss-hp, intro/outro, a proper main menu,...).
About having to restart manually: if you mean restarting the current round with r after you get hit, the motivation is that three guys hitting the maximum amount of fully charged shots should be able to take the boss down (two might be enough with some reflect-magic). So if you're at 98% progress after four guys, you can still easily win by landing a few shots, getting hit in the first five seconds and watching as the others finish the job. If you mean clearing progress, that's part of cutting most of the menu, sorry about that.
Thanks for the feedback though everyone, really appreciated. I might add a post-compo-version over the next few days, fixing a few of the things from the top of that list.