Rigging Question - Character Does Not Have a Discrete Head Separate From Body

The separate body and head layers convention is useful for puppets where you want a head turner or walk behavior where the head and body need to act independently. But there is nothing wrong with only having a head and attaching arms to it directly if you are not using those things. So the starting point is to understand what things you want the puppet to be able to do. If you just want to drag the hands and arms around a bit, no different profiles etc, then you can either cut the artwork into the head and body just to be consistent, or just forget about the body layer.

The somewhat old project wookie videos i did i started with a photo of a toy and showed how i animated it. Use the fast forward for the boring parts (it's a screen cast showing every step i took) but it might be useful. https://extra-ordinary.tv/2018/10/22/project-wookie-a-beginner-youtube-playlist/ - just be aware there are newer features in ch like camera panning and key frames now that were not available when i did the video. But it might give some ideas.