Note: Spoilers for xxxHOLiC up to Ch. 203 & possibly Tsubasa - RESERVoir CHRoNiCLE - in the whole journal.
threadhopping: y.
backtagging: y.
hugging: y. though he might be startled.
kissing: y, he'll react differently depending on who you are.
romancing: You can try, it's pretty unlikely given his current issues.
punching/physical violence/etc.: go for it, he has a tendency to get hurt anyways :|
killing: probably not. If it's for an important plot it can be discussed.
note: Watanuki's right eye is shared with Doumeki. To most people his eye will probably look normal, blue like his other one, but if your character has a sense for the supernatural then his eyes will appear heterochromatic. His left eye will be his own blue and his right will be Doumeki's gold.
- Sight: The ability to see and interact with things of supernatural nature. He also has a tendency to attract things of that nature. This is what initially brings him to Yuuko and her shop at the beginning of the series.
- Dreamseer: He is able to interact with others through dreams, early on this is shown in him speaking to Haruka and to Sakura though previously it seemed it wasn't something he was able to control. Since becoming confined to the shop Watanuki also uses dreams to "leave" the shop, able to visit places outside of the shop in his dreams though he is physically unable to leave. He has also been shown communicating with others and searching through dreams directly and seems to be in control of this ability.
- Other supernatural abilities: Watanuki has been shown using various objects to search for the location of an item, he is able to make seals, and of course most importantly: the ability to grant wishes in exchange for something of equivalent value.
He has gained some abilities in terms of warding and creating barriers, demonstrated in recent chapters.