If an NPC is using a scaleable skeleton you can play animations that set the scale nodes values however you like. You can definitely make and play a 'gradual bloat' animation on them.
Wow. That means we could have new weapon animations with new weapon types?
You could alter an actor's animations when they were wielding a specific weapon, yes, although that would require new OBSE functions. The OBSE plugin would just enable full animation replacement- currently you can't 'replace' attack animations, only add extra ones to an actor's list, and you can't remove animations. This is a problem that affected Slof's Xivilai mod, where they didn't use the new 2h attacks exclusively.
With the OBSE plugin and the mod mechanics you could for example create an NPC who has no movement animations, or a Shivering Isles NPC who can only turn left, or have the player use one animation replacer and NPCs use another.