I have read myself into this alotin the past days since.
I believe k-d-trees is not a solution, since it has to be balanced to be effektive, and deletion and insertion destroys balancedness. But and this is a big BUT you simply have to readyourself into Sweep And Prune, I believe this will be my goTo algorythm when thinking about this kind of problem, I believe one could optimize it to work with deletion and insertion.
Also the Idea of them being able to grab each other, could be interesting, at the beggining they would be able to simply have 4 hands one in each direction, they could have these active or inactive, BUT the calculation calculating the translation of a multinodenetwork with individual powers to it is not easy to compute.
Anyway in the end CTRNN is a theory, as I have found out, in the end it has to be broken down to D(discrete)TRNN, I am at the moment thinking about ways to actually make this system continuous, but there are people writing papers(not even 2 years old), that this is computable, so I believe I will not find possibilities to actually do this continuous.
http://web.mit.edu/~esontag/www/FTP_DIR/recur-survey-book.pdfhere is a link to a book that helped me alot.
For sh*ts and giggles I am working on a Quiditch(Harry Potter) simulator, where teams will be consistent of scryptbots, and I want to see how good these teams can get ;-). It is very promising. (2-Dimensional btw, but it seems to be scalable).