I believe the 2nd punch will only come out if the 1st connects (hit or block is fine). You need to press the button about a second after the 1st punch actually connects, you can't mash it out. There's a bit of a rhythm to it.
You can set the handicap above or below 100% before the fight starts. As high as 200% and as low as 50%. The only difference is you have the option to set it for yourself only and not for the opponent so I can have 50% and my opponent can have 200% if we so wish it.
Obviously changing the...
That's a nitpick and a horrible one. Most play on largest life and it allows for longer matches which a lot prefer. It shouldn't not be an option, you simply don't want it to be one.
I wouldn't take what they said about DLC as the word of God. It's all about money. As said above if they think enough people will pay for these characters they'll either pop up a DOA5 (Insert imagination here) Edition or simply say they changed their mind and they'll pop up as DLC.
That's pretty epic, but I still prefer to chop people in the back of their neck and stomp on their foot before promptly sucker punching them across the screen.