Wow, thanks for the in-depth response!
I'll initially try to go for totally unarmed(no knuckles, power fists) but only time will tell how far I'll get.
TyranyuZ, I checked a few walkthroughs, and while most of them mention that it is possible to train for 5% unarmed(can be done multiple times), none of them mention that Dragon is able to teach new fighting styles. By new fighting styles I mean that, for example, you'd get the Fisthook and Claw Hand abilities while you lose Haymaker and Hammer Punch. Are you sure that they are in this game?
Thanks.