If anyone's tackled it before it'd be Unreal games that use morphs such as head game or naughty sandbox, but I don't think they have morphs that change the body that much...
The physics asset colliders are attached to the bones, maybe that could be useful somehow? Manipulating the bones should affect the collider I think
But I'm pretty sure to do it the way you suggested, which is probably the best way, requires a deep dive into the C++ side of things. Maybe edit the physics asset c++ class to expose more controls for the colliders as a start.
I've encountered a good handful of issues where I just saw "well, that's a blueprints limitation, gonna need c++ to fix that" I've been putting it off though, I want to do everything I reasonably can, at least up to a point, before I start diving into C++, partly because I am not an experienced C++ programmer and another part because I hear some horror stories about compilation times when you start playing with the C++ side of things in unreal, such as people changing one line of code and needing to spend hours recompiling the entire project to test it out.
I'm just sorta learning the engine one feature at a time, i've mostly got the bp part down, I'm almost like a fish in water when playing with those, when there's a will, I find a way so long as enough functionality is exposed to me in the first place. I've got some barebone basics of physics asset but not enough to truly say I've learned it, similar with controlrig but the latter I at least am learning (that learning was just put on hold kinda cuz I wanted to get a better grasp of the engine basics before continuing it, i'm going back to it after I learn more about niagara) lately I've been practicing with Niagara, following Vince Petrelli's udemy course (100% recommend, it's awesome).
I've got the basics of the niagara system down already, I know enough to make most vfx any standard game would need already more or less, but I'm only 1/3 through that course. I never expeted it'd be this fun to play with it.
Once I'm through the course, I will try to play around a bit with the niagara system, things like niagara softbody, maybe niagara hair too, and of course niagara semen and saliva. Then it's back to controlrig, and it's only really after that (i'll probably spend quite a lot fo time on it, it's more complicated than niagara imo), I'll start another more comprehensive course where the author teaches you how to make a complete game with a strong focus on c++... Beacuse you're never properly utilizing unreal without using it's c++ capabilities, it's one of the best parts of the engine really, but it's alsso definitely the most complex part of it.