Going with 2 x3's would save you an inch per wall. With 1/2-height walls
you probably won't notice the resulting loss of strength. The question is,
does 2 inches really make that big of difference to your layout? I wouldn't
go any less than 2x3's.

As for code issues, I have no idea. I kind of doubt it matters, since this
would normally be done with glass... But check with your inspector to be
sure -- it's his/her final call.

-Tim