The basic thing is: the faces are entire meshes, so you can't just use the nose from there and the checks from here. The best bet is reworking the meshes, just apply simple changes like nose shape, chin lenght ... stuff like this (maybe adjust the head textures if needed), then simply save them as new entites. We could e.g. use the male npc heads and multiple them by 5, so instead of (imaginative figure) 30 we would have 150 different heads.
To be honest I have no idea about restrictions of file sizes (mods) or as to how many elements wcc_lite can cook. I can confirm though that the largest file I ever cooked contained 244 assets inculding new meshes and textures as well as entity templates.
And as you said, skilled artist are highly needed, but sadly those have no interest in modding W3. There are some talanted one on other games, that is for sure. But I think the main problem was/is that most people think W3 is not really moddable. And regarding some aspects of the game I totally agree (it's an awefull lot to do with little actual breakthrough), but regarding such things as character assets, nearly everything is possible (I am speaking of meshes of course). This is one of the main reasons I started the Appearance Project.