YEah your game is looking really good : )
i like arcade ones.

For speed improvment , the only thing you can do is :
-using LOD for models ,
and avoid using C_trace or other consuming functions when ennemies are too far :
use a simple BOX test :
-if the ennemie distance in X axis or Y axis is more than 50 for example , don't compute more precise tests using C_trace or other things.

You could use Glow effect even in commercial version with the great plugin given
by Heelx if i remember well
it oculd only enhance the graphics.
Keep it up.