Can I build a NPC house out of Hellstone?
Can NPC homes be built out of Hellstone? Will they settle in? If they do, will they take damage?
Yes, they will move in. The only wall requirement is that it is solid. As with Spikes, NPCs do not take damage from contact with the Hellstone.
Although Hellstone emits light, it doesn't count as a room's light source; hence the Torch.