What if the character is depressed but in good health? As they take damage, this can't be shown in the mood. And then on getting healed, although their physical health improves, their emotional health doesn't. The two resources need two different feedbacks.
Regarding mental state and physical state then I think that one should effect the other or you risk to send very incongruent messages to the player.
Let's say your charter is badly hurt, near death situation, why should his mood be happy as if it was nothing!?
As I player I would find that quite contradictory and confusing if not ridiculous.
Mood affecting HP/status and vice versa makes much more sense IMO and if you have encouragement/discouragement mechanics then they would be more effective and believable this way.
Examples:
A charter is hurt but if she/he is cheered up by a partner then she/he might recover faster then normal when given a potion or strike harder after that
encouragement.
A character is happy but then receives a strong blow, he/she gets bit depressed/demotivated and as a consequence his/her next attack/s is/are weaker BUT if he/she is encouraged by a partner or performs a critical strike, then he goes back to his happy state and damage output goes back to normal.
This way moral support from teammates, or lack of, really becomes meaningful/impactful and would not be just for show.
Maybe there could be "special" moods like "fearless" or "terrorized" that are independent of HP.
A charter in "fearless mood" could have no penalty whatsoever and still fight despite being severely injured (power of adrenaline) while a "terrorized" character would suffer penalties (damage output reduced, slowed, etc...) despite being in full HP.
How about exclamation mark particles above the head? A few little ones when hurting, and loads of big, scared exclamations near the end?
Exclamation/question marks but definitely would work but unique mood icos would be better IMO.
In magas there are a "signs/marks" for various emotion (depressed, angry, dizzy, annoyed, etc..) so maybe you could use those.
For the record I am just writing down what crosses my mind before I forget it so I am not telling you how to do you own game.