When considering damage, keep in mind that these same rules currently apply to monsters attacking you as well.<br/><br/>That said, I do think that raising the damage from "2d8 + 1d8 per five levels" to "2d8 + 2d8 per five levels" would help some. The resistance to nonmagical damage is a problem at higher levels, but would be a great place for DM's to introduce a magic item. Introducing a feat to cover that would make that feat a tax/must-have, which at that point means it might as well have been included for everyone as tax-feats feel really crappy as a player.<br/><br/>In the Pathfinder VSRD, goo characters had the compression ability, which only allowed them to compress to 1/8th their size (counting as squeezing). For a medium creature, this would still be far too large to pull really serious shenanigans like what you've described while also keeping the flavor of the thing alive. A six foot tall creature could only compress through a space of nine inches or larger.<br/><br/>I think that resistance to non-magical slashing and piercing is nicely offset by the vulnerability to fire and lightning. The lower base AC is something that would cancel out the benefit of the compression-ability, but I'm not a fan of the negative modifier to hit on top of it. I get where it is coming from, but I would like to try to keep the number of modifiers introduced to an absolute minimum.<br/><br/>Of course, it is ultimately up to the DM to determine what is best for their players and their game!