Zooming in and out could spell trouble for screenwrapping abilities, but would also make them a shit of a lot more compelling - so do that or so help me. Actually, screenwrapping as a special maneuver would immeasurably improve Smash Bros too. They should stick that in Indie Brawl (but they won't).
In addition to Knuckles Chaotix, you might want to take a look at:
http://www.onemorelevel.com/game/a_walk_in_the_parkand Space Duel (Owen Rubin, the guy who designed Major Havoc did this! He also did some work on Battle Zone and the not-legendary-but-should-be Night Stocker).
The original co-op videogame is also a tether game: Fire Truck. One person controls the front end and one controls the carriage. You can both ring the bell. I think it was released in 1978? But Knuckles Chaotix is kind of the standard for the form. Maybe also check out Jimmy Lost His Toilet Paper and Umihara Kawase (sp).
The robot idea is copyright my imagination 1994, when I came up with a sweet-ass Voltron arcade game in my head.
There are actually quite a few arcade games I know where you can join up with another player. Side Arms, The Simpsons, I can't remember what else but there are more.
I guess also: Players should be able to stand on top of each other's heads, but there are some combinations that are better than others. Like, the Knight would be a safe bet for the bottom, but maybe would wobble higher up.