Wow, I'm late :P
This is like the most amazing idea for a pokemon game that could ever happen! Very nice! I have some ideas I could contribute to the discussion, so I'm going to post a couple and see how you like these.
For the attacking part, there could be a light target, and if the target is on the Pokemon, then the attack has a greater chance to hit. Of course, this would change with the accuracy of each of the moves, but I think it's a good starting point.
To elaborate on my idea, maybe there could be a Star Wars Battlefront deal. Each difficulty level (if we have one) could possibly take away some aspect of Locking-On, i.e, on Easy, you could lock on and have the camera follow the Pokemon as it moves around. As you somehow would move the camera, when the Pokemon gets in to the middle of the screen, it would stick there for a little bit, then keep moving (mostly for like multiple pokemon battles, but this could still work for one-Pokemon battles.)
On Medium, it might take away the sticky function, to make it a bit harder. On hard, there would be no aspects of locking-on, so it would take a pretty experienced player to play on hard.
Also, possibly, in the show, there are always things in the background that help the pokemon battle better (used loosely). Like, Pikachu once used Iron Tail on a tree to make some apples fall on the other Pokemon XD. This could possibly put into the game, say, picking up a rock in a cave and throwing it at them, or using flamethrower on the ground in a forest to stop them from coming closer except by jumping, or whatever.
exactly what I was thinking. I'm sorry, but I don't like your idea of locking on, although your backround idea was brilliant.
And now a question:
Would abilities be implemented? Say, a Kingdra when it's raining wherever you are at moves twice as fast? Or a gyarados coming out would make physical attacks do less damage? This brings up another issue that I'll bring up later.
Hope that helps :D