For your 1st question, the answer is to use smoothing modifier on the guy and set its collision item as the dog.

In the pic shown below, I created a plane 1*1 with 10 divisions and used smoothing modifier and set the standing figure (genesis) as the collision item to create the indent. You can also increase the number of collision iterations and decrease the number of smoothing iterations. Also changing the type of smoothing effect from "base matching type" to "generic" helps to create more collision impact but in a smaller area