Thanks for your feedback. While there are couple of reasons for choosing Unity3D over Unreal more than anything else it has been the cost factor. Unity3D basic version is free (for organizations that make annual revenue lesser than some threshold value) versus Unreal Engine which is paid. Since I am still a novice Indie developer not making any money from games I am trying to keep my cost to a minimum :)
Yes, I have used free graphics and optimized them to reduce the vertex count and size and also created custom animations. All the arenas / level have been modeled by me though.
I agree that games, especially indie games, need more designers. Since indie games usually don't end up making enough money its difficult to find designers who are ready to work on profit sharing basis rather than upfront money.