This is already possible: hit-boxes are drawn with the same color as the mini-map avatar dot color; you may change the latter via Lua (with the SetAvatarMinimapColor() function).
An example is provided in the
Lua manual (in the appendix A), on how to use it together with the Lua pie menu for avatars (SHIFT+right mouse button click). See the page with the DefineAvatarPieMenu(), OnLuaPieMenu() and OnAvatarRezzing() functions in this appendix.
You could of course make a more elaborate UI in Lua, for example with a Lua floater that would use the radar data to list the avatars around you, letting you select the ones you want to change the color for...