It is not at all uncommon to have a work for hire contract allow the things your artist requests, such as being able to display the work in their own portfolio, getting "game credit", etc.
I'm curious what your (multiple persons) thoughts are on the bit about wholesale reselling. How typically is something like that brought up? Is it actually a serious problem for art contractors? Would you be willing to forgo those rights as a game developer hiring an artist? It's mostly an academic question for me, since I'd rather get a good artist at a cheap price and forgo those rights for my first reasonably sized game than hassle about it and have to find a different artist.
You've now crossed over from legal issues to business issues. .
As a game developer, you want as much control over what they deliver as possible. Ideally that is everything. And typically an artist who is paid for their work should not expect to retain any rights. They create something to your spec. You pay them. You own it. End of story.
All that said, it is perfectly acceptable to give them back some of those rights. However, if they want something of value (eg limiting the rights they give you), then it is perfectly reasonable for you to expect something of value in return (say paying them much less money).
I've seen this come up moreso in game music than in art. For example, a composer may want a "piece" of game soundtrack sales. In such cases, what is typically done is a work for hire agreement, with an additional clauses that the composer will get a certain percentage for uses of the music outside the game itself. But often that clause comes at the cost of a lower fee.
I'd highly recommend you make it a Work For Hire agreement,and then give back specific bits, as opposed to making it not a work for hire agreement, and then trying to add in all the things that you need as a game developer. That would make it more like a license agreement (they retain ownership and give you certain rights) and that is fairly unusual when the artist would be creating new art for a new game. (it's a different story if, for example, you wanted to incorporate art that has already been created into your game). Also very important is that, while they may be the author of the art asset, you as the game developer own the characters.
Hope that makes sense! Good luck-- it sounds like you're asking all the right questions.