go for C++ you'll have more power in your hands, and the overhead is the same unless you create local objects that need destructors... And you'll have less issues. C is crap.
An example of Amiga game I have written in C++:
https://github.com/jotd666/bagman (uses blitter of course)
Modsurfer was written in C and uses blitter and stuff:
https://github.com/amigageek/modsurfer
Both are cross compiled using Bebbo's gcc distro. If you're targetting A500, sadly it seems that assembly is the only choice for a fast game. Unless SAS C is better for performance.
A lot of old games were written in C, but those were VERY RARELY arcade games.