Earlier quoted context omitted.
I agree, the yellow/green/red is rather difficult to distinguish. Aside from altering the colors, it could also use different symbols. In general, it's good to have multiple distinguishing qualities (e.g. color, shape, texture). This helps make things more distinct for all users, not just those who might be colorblind.
Agreed. The overal design direction (have those glyphs "#" as it resembles thorns for a Game of Thorns inside a tower filled with brambles) won over usability in certain cases. If this was a full-blown game (and not a 7-day proof of concept), I would try to make the combat UI more robust.
Still, if you are set on using #, you could try varying size, boldness, italic, rotation, font, etc.