There are practically no size limitations.
The game positions characters by centering their feet on a location, so different sized characters will all stand in the same place. It's very convenient.

Collision is automatically a 10x10 square, which normally isn't a problem even if the character is somewhat larger.
It's often a good idea for collision boxes to be slightly smaller than the character anyway.
And a keeping the collision box smaller than a tile makes it much easier to walk into narrow corridors.
Also, a character's height doesn't matter as far as collision goes since it really only represents where they can walk, and therefore represents where their feet go.
So unless the character's footsteps are larger than 10 pixels, it should be fine.



A character can switch between different sprite sheets at any time.
Each sprite sheet can use completely different settings and sizes.
Within a single sprite sheet, each frame of animation must be the same size. They also need to match for all directions.
A sprite sheet can have any number of directions, stacked vertically on top of each other. Starting with up, and rotating clockwise as it goes down.
Animation frames start from the left and go right.
When you change the character's pose, you can tell them which animation pattern to use, how fast to animate, and whether the animation is paused:
- loop:  The animation repeats over and over.
- yoyo:  The animation plays forwards, backwords, and forwards, over and over. This is good for simple walk animations.
- once:  The animation plays from left to right, then stops on the last frame.
Animation can be paused, allowing you to set the character to any individiual frame.
Finally, multiple sets of directions + animations can be tiled within a single sprite sheet. But if you do that, the number of directions, animation frames, and the size of each frame must be the same for all of them. So I actually recommend using separate sprite sheets instead, so you can change one without having to change all the others too.
The only reason the sprite system allows multiple sheets within a single image is for compatibility with RPG Maker 2000 character sets. That feature does work, and you can use it. But there's really no reason to.