Like the idea of radiation and hazards. TIME FOR A BORING LOAD OF TEXT!
Before I start typing I'd like to point out I don't know much of anything about programming so please don't flame me. Just tell me where I went wrong.
First off. Radiation isn't visible so no glow is required. Secondly as far as an area of effect thing goes, why not just make all blocks have a radiation number, nothing complex just a number from 1 to x (x being the range you wish radiation to effect the player from the radioactive block).
For example my uranium block has a radiation distance of 5 so it makes tells the blocks around it to become 4, they tell those around to become 3 etc to 1. At this point the blocks don't need to check around them anymore as any changes to their state will come from them being destroyed.
I imagine that the players avatar has code to detect what blocks it's inside of and stood on(I assume this because noise changes when we walk over different blocks and lava and water burn / suffocate us). The players avatar could then be made to detect the radiation level it's in and on. Any amount over y(whatever amount is judged to be fair) and the player would start taking damage, below y the player would be able to detect radiation but not take damage from it. Geiger counter could detect every second and show radiation level or show on activation. I would not have damage over time radiation as I do not think it fits but that would not be for me to decide. I'd rather take immediate damage(even tho not as realistic) and know not to go back where I just was without protection.
Now...the protection. NOT lead. As al has stated he doesn't want new ores, this whole idea is worked into existing blocks. Lead is used for radiation shielding because it is dense. Steel is half as effective but STILL effective vs radiation but making a full steel suit to combat radiation seems half so...a suit of advanced allow and a re-enforced glass panel to see through. Newer radiation shielding is made from layers of metals of lower and lower density. The steel-copper-tin advanced alloy would do nicely. If someone wants to be realisic you can pretend there's a high-z metal infront of it, too specific for this.
If I've said anything stupid or wrong please point them out.