Yeah, it seems the player and bullets won't go under the trees, unlike some enemies. Menace ship was a sprite iirc. Then in a vertical shmup like this you can reuse bullet sprites a lot since they won't overlap scanlines.
I suppose making most enemies a military/earthy/terrain colours (greens-browns-grays and persistent crater glow/flash) would allow for smoother colour ramps, at the cost of readability. Then you value match against the arcade gfx, kinda ignoring/discarding hue.
There's seemingly an existing Amiga version based on the ST source?
https://www.mobygames.com/game/amiga...ShotId,799922/