Suggestions for a proximity sensor

RFID usually works at really short distances, though there are forms of RFID that can do more. It sounds like this may be a good thing for your, as it seems you want them to react only when they're pretty close, as in less than half a meter or so.

You may want to establish some form of secondary communication, so the two start to glow at the same time. Basically one stone saying to the other "I can see you! Can you see me?", then the other answering "Yes, I can see you, too! Let's start glowing.". Then they can glow at the same time. Same for losing contact.

I'd say you're nice on time, not too far ahead. It's often surprising how long such projects can take when that little thing called "life" gets in the way again.