Model Toy LEDs and Sound Wiring?

The objective is to take two store bought figurines and to have a red LED implanted in the chest area of one of them that illuminates when it is in close proximity to the other figurine.
I am trying to have the circuit as unobtrusive as possible while still being technically correct and safe.
I would like to offload some of the potential "obvious-ness" of the circuit/battery. I think having a secondary item (maybe a tree or car) that is related to the character, and then putting the circuit and battery in that would accomplish this. I could then install a wiring harness inside of the figure that would terminate with a spade connection at the underside of it. This could then be connected to the secondary item to power the mechanism when the two figures are close enough to trigger it.

My plan is to:
- Use a small diameter drill bit to *slowly* create the outline of the heart on the first figurine --------> about 1/32 deep
- Use a thicker drill bit in the center of the heart shape to make room for the LED circuit
--------> about 13/16" deep
- Use a smaller drill bit to run the wires from the back of the LED cavity (that I created with the thicker drill bit) down to a terminal implanted in the figurine foot
- The figurines are in the mail (should have them Monday) and are made of PVC so they should be pretty easy to work with
- Dimensions are 2.2"x 2"x 4.4" so they are fairly small

I considered doing this multiple ways but it seems that a reed switch would be appropriate; this would allow me to put a magnet in the second figurine that would close the circuit and illuminate the LED when they are in close proximity to one another.

Questions:
Do you think a magnetic hall effect sensor might be better considering the size limitations? I would like the circuit to consist of nothing but the LED, the resistor, the battery, and the as yet to be determined magnetic trigger. Would using a magnetic hall effect sensor require an additional component in the form of a relay?
Are there any wireless solutions to this? I know it's possible by using coils of wire but that would be impractical and impossible to conceal. Perhaps you are aware of other options in that area.
To make it even more complicated (haha) I was also considering having a 9V recording module (capable of playback) that would be triggered when the circuit is closed. I could record a sound clip of the character that plays at the same time the heart (red LED) illuminates.

I am fairly new to the world of electronics but have solid experience in soldering and can be as patient as it takes to do it right.
Thanks for any suggestions

1.

In order for a reed switch to be most sensitive to the magnet, they must be oriented in a particular direction relative to each other. (It is the same with a hall sensor.) You might find a way to arrange two reed switches in parallel, so that one or the other will operate. (Or two hall sensors.)

You will probably need to amplify the sensor output, so that it can trigger another amplifying device.
Or instead of a hall sensor, there is such a thing as a hall switch, if you can manage to locate one which is sensitive enough to use by itself.

Neodymium magnets are strong for their size. You can stack several of them, in order to increase their attraction at a distance.

2.

As far as wireless detection...

It could work to have an oscillator broadcast a brief carrier wave every 5-10 seconds. The second circuit is tuned to detect that frequency and amplify it, to turn on the led.

Both the transmitter and receiver can be very small and very simple, powered by coin cells. If you leave them running long term, then it is hard to predict how long the batteries will last.

Brad,
That's what I was afraid of as far as the reed switches go.
I have found a few magnetic switches online. It looks like they are more sensitive and less particular about the direction of the magnetic field as compared to the hall sensor/reed switch. Seems like a strong option.

If I used the magnetic switch, then could it be done by using the following items?
- magnetic switch
- small coin battery
- 3V cell holder for battery
- resistor
- LED

If so, I could probably hollow out one of the LED-containing figure's legs for the battery/switch/resistor, and then hollow out a small portion of the other figure to insert the neodymium magnets. Ideally the mechanism would be self contained and only require the two figures in order to work. This would also make it look a little bit more professional.

Yes, those components could be all you need, as long as the hall switch can provide sufficient current to power the led (20 mA or so). If it is not then you will need to install a transistor for more power.

This fellow's website discusses hall effect devices, and how to use them.
30% of the way down the page, is a circuit similar to your concept. Although his hall switch is a 5V type, he says it is obsolete, and a newer unit should be more sensitive.

https://www.bristolwatch.com/hall_effect/index.htm