These portraits can be on the titillating side, but I recall a guy that does portraits almost exclusively in M43 in England.
Check it out...I think he does really good work, if a bit on the racy side.
He uses a GH1 and GH2, but the moral of the story is that as he grows in his craft, he is switching over to a Canikon system - can't remember which, and I think because of the better depth of field control. He is a paraplegic, which is why I think he might have started with m43.
The point is, I think his portraits are very good and show off well the Panasonics can do.
The GX1 sensor is derived from the GH2 sensor, so you should have no issues there, especially in controlled lighting situations.
The GH1 is ancient by today's m43 standards, yet it is still very capable.
Personally, I find m43 begins to fall down in high ISO, action oriented situations, and especially with the shallow buffers, but is a brilliant system for most other situations.
I think the OMD has rectified many of those shortcomings, at least the high ISO and shallow buffer problem. I expect Panny will do the same with new offerings.
Bottom line, I think the GX1 will do you fine, but personally, I would like a camera with a viewfinder, and at least a tilt LCD, if not a fully articulated one.