You will probably make it a lot easier on yourself and avoid a lot of user errors if you allow the declaration of variable-length arrays to be delayed until a point where the size is known. Then you don’t have to invent a syntax for assigning the array size and you don’t have to deal with differences in the order in which arrays are declared and in which they get their size.

If your compiler uses a stack-based allocation scheme for local variables (they are given addresses relative to the stack-frame of their function, like it is done for the ‘big’ platforms), the variable-length arrays can just be carved out of the stack frame as needed. Only if there are multiple variable-length arrays in a function do you need an additional pointer to indicate where the data of each starts.

If your compiler uses a fixed allocation scheme (all variables, including locals, are given a fixed (absolute) address by the compiler/linker), I would use an ‘array stack’ for carving the variable-length arrays from. As overhead, you would need a global pointer to indicate where the free space currently starts, a pointer for each variable-length array to indicate where its data is located and, in each function using variable-length arrays, a way to restore the global pointer to the value it had when entering the function.
The user would also need some way to indicate to the compiler/linker how much of a ‘array stack’ he thinks will be needed. A reasonable default could be to use whatever is left after allocating all fixed-size variables and variable-length array overhead.

I think this scheme uses the least amount of overhead, both space and time-wise. The scheme you came up with is essentially a malloc implementation.

Variable-length arrays in C99 are still fixed-size; you just don’t know the size until runtime. They’re not dynamic, so you can’t declare int foo[] and start accessing elements. There’s no way to know how much space to allocate for it and there’s no magic that goes on behind the scenes that rearranges everything as the array grows.

In earlier versions of C, the compiler did a single move of the stack pointer at the start of scope because all of the variables were declared up front:

{
  int foo;
  int bar;
  // Stack pointer gets nudged 2 * sizeof(int)
  ... Code ...
}

What makes VLAs possible was a change in C99 that allowed declaration of variables anywhere in the code instead of just at the top of scope:

{
  int foo;  // Stack pointer gets nudged sizeof(int)
   ... Code ...
  int bar;  // Stack pointer gets nudged another sizeof(int)
}

Being able to do this means that to create a VLA, all that has to be done is evaluate the expression in the brackets (which can use previously-declared variables because the compiler knows where to find them), multiply the result by the size of the array type and nudge the stack pointer by that much:

{
  size_t size;  // Stack pointer gets nudged sizeof(size_t)
  size = get_number_of_ints_in_input();
   ... Code ...
  int data[size];  // Stack pointer gets nudged size * sizeof(int)
   ... Code ...
}

As long as you keep track of how much the stack pointer has been moved, you can pull it back where it should be anytime you go out of scope.