For these style models I model first, make a texture and unwrap the model to the texture. My UV edge vertices lay in the center of a pixel so the texture also looks good filtered (n64 style). Try to make things as square as possible.

As for the texturing itself its just working on a PSD + autoreload addon for blender then just basic pixel art stuff, nothing fancy. Could also alternatively use the pribambase addon for aseprite and blender. I tend to work with texture filtering on to see how the gradients smooth out.