Slightly off target
First off, I like any SHMUP that allows you to get more powerful by more means than picking up powerups. The leveling-up system was implemented well, and every time I hit that XP mark, it felt like I was getting stronger. The shop didn't feel quite AS complete, though. It took me until world 3 to find any kind of specialty weapon, and even then, I still found a majority of them still acted alike. Not to mention I barely felt stronger every time I purchased a new engine or shield, with the ship mods proving to be a lot more worth my while (and cheaper, too).
However, I think the main problem with this game is one tiny little design oversight. Next time you create a shooter, I ask that you please not make the ship the actual size of the player's fist. It's absolutely impossible to maneuver this piece of crap through tight spaces and come out unharmed, even with extensive speed upgrades. Because of this, I end up creating what's more akin to a flying fortress that can take a million points of damage or just kill everything outright before it becomes a problem instead of focusing on actual speed and skill. In this sense, the entire game becomes counterproductive as soon as world 2, and it really took a lot out of the experience for me.
All in all though, this game isn't so bad. If you're going to have RPG elements, though, you may as well go the full nine yards. Maybe introduce different ships with differing pilots and passive traits that help differentiate them. Throw in a skill system that gives players the chance to save themselves in tight situations. And of course, it is a cardinal sin to have ANY shooter not have bombs, so I suggest you get on that. Your heart's in the right place; now you just need to take full advantage of your game's potential.