I've heard that if you can pinch their skin and it doesn't "snap back" and just stays folded or pinched, it could be a sign of dehydration. Don't hold me to it though, and don't get all worried or anything. That's just what I remember reading somewhere.

As for squishiness, my babies pretty squishy around her stomach area. I think that's because theres no bones or anything to firm it up like the ribs and back area are. I dunno. If it is unhealthy, then I guess my baby needs something to firm her belly up.