This is for the upcoming tournament: I'm not against Irene participating because she's originally a human. I am however, against any dead characters so that eliminates characters like Auugst and Irene. As far as this thread goes, I think I will just adhere to Kiki's ruleset.
Irene's human form bleeds and can feel pain. She also died in her human form by stabbing herself. So all in all, I consider the human transformation as being separate (and weaker) than the dragon form. So yes, Acnologia is stronger in his dragon form. As are characters like Mercphobia. Kyria's roar can badly injure Mercphobia when he's in his human form, whereas the dragon form can no sell the combine effort of the team all with dragon slaying seals. Mercphobia also reverts to a human form now that he has no magic power. It's likely that turning into a dragon isn't actually some terribly difficult thing to do. Elfseria can do it all on his own, and all of the god dragons can do it on a whim. Irene, for whatever reason, just couldn't figure it out.
August at first glance seems to be able to easily top this tournament, but I wouldn't actually be so sure. August's ability to negate caster magic is a tactic to defend against magical attacks, but the limits of his durability can still be seen in how he took damage from Brandish' knife and Gildart's punch. I can see an argument for other characters having better durability if we discount the ability to negate caster magic. Other than that, I expect Erza, Laxus, Natsu, and Madmole all to score relatively high. Madmole in particular has the potential to rise to the top.