In demo 18, inertia is still annoying, and the pace is glacially slow.
In the first few waves, the player has enough firepower to kill all enemies, but the combat takes place as if in slow motion, 10 or 20 times slower than in a normal game; requiring many shots to kill the humblest enemies wastes time without an apparent purpose.
Enemy energy blast are so slow that they can be dodged despite inertia, which is quite the opposite of the right way to balance difficulty.
Increasing firing speed would have an important special benefit in a game about evolving enemies: the player would treat enemy waves as a unit, and compare successive waves with each other, instead of focusing on shooting efficiently each ship without paying attention to waves and enemy behaviour.
There are games where shooting is slow but every hit counts (like Space Invaders) and games where enemies take their time but the player can dispatch them quickly (like Dodonpachi); in your game the enemies are few and boring but they require an extraordinary effort to kill, producing an unpleasant atmosphere of sad ineffectiveness.
Requiring the player to press CTRL repeatedly to shoot instead of providing autofire is player-hostile; there's no reason to charge shots or to stop shooting. I suggest eliminating charged shots completely.
Bad collision detection and absence of feedback when enemies have been hit is an unpleasant defect; spending several seconds to line up a shot only to have it tunnel through enemies is always disappointing. Any collision detection bugs should have a much higher priority than adjusting difficulty or enemy mutations.
Choosing collision shapes in the player's favor (i.e. every opaque pixel of the enemy against a circle that is slightly larger than the bullet sprite) is the "industry standard".
Overlapping enemies are a related problem (without feedback, how can I tell whether my bullet hit an invisible enemy?) which should be addressed with less random and less ugly enemy movement (for example, you could space enemies evenly on each row of the screen, making late comers slow down to avoid overlap).
Reducing shot power with distance is quite bad in your game because without vertical movement the player has no control over shot flight time: in the first part of the level, when all enemies are far up in the first rows, the player is completely ineffective.
Rewarding short flight times would work in a game with normal movement as a way to encourage the player to boldly apprach enemies and shoot them from very close in order to kill them fast.
Example: Raiden III, where weapons with very wide firing patterns do much more damage at point blank range (no shots are wasted) and there are large score bonuses for quick kills. Please play Raiden III to understand why 2D movement would be a good thing.
