a fun little animation. and a sonic reference.

It's not a bad start, but I think what needs to be worked on is "distinction".
It mostly just looks like they're running into eachother over and over again, none of the "moves" really look like much or that they do anything different to the receiver than anything else.

For primarily melee characters, like the Nobody character, he looks like a Mage or something to me because of the pointy hat, have him dish out stuff that looks like magic, much like his final blow does. Do more of that, less of melee.
And of course, Axel, have him attack slower with that giant axe. Make him feel more danerous by carrying a lot of weight.

Ultimately, jsut slow it down, be more tactful and thoughtful with each attack, plan out the choreography first if you have to. Make the fight feel less like two hand puppets fighting, and more like characters in a work of fiction duking it out :)