You could either do an AnimationPlayer attached to the sprite that adjusts the scale over time and loop it or you can just transform it in code itself. Depends on the application.
Something like:
$AnimatedSprite.scale.x = 0.99
would shrink the scale horizontally and...
$AnimatedSprite.scale.y = 0.99
would shrink it vertically.
But you should just be able to edit those values in an AnimationPlayer node - even easier, to be honest. You can have the AnimationPlayer change the sprite values while the sprite plays its own animation frames without having to do it "manually" in the art as you did above.
As for the lighting effect, the WorldEnvironment node is what you're looking for. It is likely just some settings in that one to dampen the color values of the scene. That, or perhaps a 2D overcast sprite with a low alpha value.