I'm sorry to say that this seems to be entirely impossible in Emacs currently. From Line Height (emphasis mine):
The total height of each display line consists of the height of the contents of the line, plus optional additional vertical line spacing above or below the display line.
The height of the line contents is the maximum height of any character or image on that display line, including the final newline if there is one. (A display line that is continued doesn't include a final newline.) That is the default line height, if you do nothing to specify a greater height. (In the most common case, this equals the height of the default frame font.)
There are several ways to explicitly specify a larger line height, either by specifying an absolute height for the display line, or by specifying vertical space. However, no matter what you specify, the actual line height can never be less than the default.
In other words, you cannot shrink the line height below the maximum height of any character on the line. Hence, having lines with overlapping characters is impossible currently.