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Is it possible in the Android API to communicate directly to another android phone within close proximity? If so, which version of the API is it in? For example, if both phones had the same app, can they exchange messages in the background within close proximity?
The short answer is yes. Some apps, i.e. Bump, already do that. Usually android phones have both WiFi and Bluetooth capabilities. Given that you are talking about close proximity Bluetooth should be enough for you. Alternatively once one of them is configured as a WiFi hotspot, you can connect them via WiFi.