Hi BrightC,
Have you tried the “Condition Tile Sheet Texture” option in the context menu for your tile set? It adds bleed padding around each tile to avoid texture sampling artifacts that can sample fractionally outside of the boundary of a tile and cause artifacts like shimmering gaps or color bleed.
For z-shifting causing issues with collision, I’d recommend decoupling the component doing the collision from the component being rendered. Keep the collision component (either a sprite set to hidden or a box/sphere/capsule) as the root component (or attached to the root) and attach the visible sprite to that component (you can still use the same sprite for both if you have complex collision, set one to hidden and the other to don’t collide). This will let you shift the visible component freely without worrying about what happens to the collision and is the same way 3D characters are handled for the most part; the capsule component and character movement component do all the work there and the skeletal mesh is just along for the ride.
Cheers,
Michael Noland