the move speed needs increased to make this game playable on difficult - that or slow down the opposition. (in favor of the latter, actually)
I'd see this more as a centipede type game - have the opposition and the main character for that matter be walking around instead of just floating heads. It's a little more programming and some more graphics, but you can do it.
So... slow down the opposition, and since the stage isn't moving anywhere, make it so the items don't just float to you - make the player go get them!
and smaller targets.
But difficult is incredibly easy since you can shoot bullets and explode shit