All tiles and sprites were converted by Fade1 to fit into 32 colors. Each level has a unique set of 8 colors and 24 are shared among all levels. With a lot of tweaking it was so possible to have almost 1:1 arcade gfx on Amiga 500.
Gradius/Nemesis don't have that much gfx, but they use a lot of palette recoloring and X/Y flip. The arcade sprites use 16 colors each (out of many different palettes). The hardware can even zoom sprites, which needs additional large animations on Amiga.
In Tinyus on Amiga all moving gfx need 10 bitplanes (5 color planes + 5 mask planes). Most of the gfx need also X/Y flip and different palettes. The combination of all these attributes fills quickly all available chipram on A500.
A typical enemy animation with its amiga gfx:
It was not even possible to have only the gfx for the first level in chipram.
So gfx needed to be depacked on the fly or streamed from slowram to chipram.