I like, nice flavour,
Critisism:
Charm Person gives a +5 bonus when you or your allies threaten the target, you might want to consider using the same value.
In a way, this spell does the same as Sanctuary (In some situations.), a level 1 cleric spell.
The other use of the spell is like Disguise Self, a level 1 spell as well.
I am a bit doubtful wether the combined effect warrants a level 2, especially since you can't use both at the same time.
I'd make it level 1.
Nitpick:
Spell descriptions that can be used on yourself as well as others usually say "Living creature touched" or "Creature toched" under "Target". (And that is target, not targets ;))