I guess my biggest concern or at least the one that is likely to prove the most difficult to fix are the graphical issues on lower resolutions, could you possibly post a screenshot so that I can see what's going on there ?
It's technically a ratio issue and not a resolution issue. My monitors are normal - 1920x1080 for my tablet monitor, and 1600x900 for the laptop's built-in monitor. Other than the performance problems, the game looks and functions as intended if I set it to something like that. It's when using the resolution settings to choose something that's not 16:9 (which is what most of the smaller options are) that this happens, so I can't think of any reason why you shouldn't be able to test this for yourself.
1440x900, fullscreen || I left in the automatic pillar-boxing.
1024x768, windowed | Title || I could do fullscreen, but it's the same as this with black pillar-boxing on the sides | The white border is just some of my desktop surrounding the window
1024x768, windowed
Unfortunately I'm really not a PC gamer, so I don't know what's normal to do here. I think what's usually done in a case like this is that the game has a distinct ratio menu option for either 16:9 (aka with sidebars) and 4:3 (without sidebars, put the score up in the top-left corner), and then the resolution options just pillar- or letter-box from there. So, if someone with a 4:3 monitor chooses 16:9 for some reason, they play the game as per the screenshots you've been posting, but letter-boxed to fit the screen.
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The sound volume is an annoying one, I've already reduced the volume several times and thought I had it about right, the sound effects are just some free ones I got from Freesound.org . Is it just the sound effects or is the music too loud aswell ?
The music is fine, and upon further inspection, the explosions seem fine as well. It's just, like I said, you have instances where the explosion sound effects are being played on top of each other, causing a phase-alignment amplification. So, your bullet hits an enemy - BOOM - and the enemy also dies from that shot - BOOM #2 - and if you're getting hit at the same time, well - BOOM #3 - for potentially near-3-times the normal volume (+ some sound "flanging"). You just need to disallow playing identical sfx on top of each other like that and/or go find a few more different explosion sounds to use (b/c if they're different, they won't amplify each other).
Also typically player bullets hitting enemies won't use a full explosion effect
The sound effect for collecting pick-ups, though, is definitely way too loud.
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Good point about the speed and health powerups, that was just me being lazy really, I'm thinking that maybe I could put a red cross on the health powerup.
Might be better to just make one of them orange or something. Also,
be careful with red crosses. 
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Weapon Balance
I was trying to make each weapon type highly situational so that as you've mentioned the Green weapon would be best against bosses. The Red weapon is more of an all rounder for dealling with second tier enemies but also good against smaller ones. The Blue weapon probably does need beefing up a bit and probably won't be included in the first mission of the final game ( I don't want to show off all the goodies on the first mission).
Is this a bad idea ? Should the weapons all be more rounded allowing the player to choose their favourite and stick with it throughout the entire game ?
Hm... situational pick-ups is definitely how a lot of older games did things. Personally I can't say I like the idea of picking up a weapon and then finding out that it sucks, either for the upcoming section, or just in general. Granted, I think the weapons you have at the moment aren't so different from each other that this would happen to such a severe degree.
I get what you're going for with the Red and Green weapon, I just personally think that, as it is, they serve very similar purposes (ie they shoot forward and damage a single target), so one of them having at least one unique property could help. The immediate thing that comes to mind would be having the Green weapon pierce, so while it has no horizontal coverage, it can damage multiple enemies vertically. Of course, something like that might also just make it overshadow the Red weapon
Something to consider is letting the player cycle the weapon drops for more choice on what they get, either by having them change over time, or changing whenever the player shoots them. Many games, such as Raiden, do this. Of course, games like R-Type obviously don't, but the weapon selection you have here is closer to Raiden's than R-Type's super-gimmicky sub-weapons.
You can still trickle in power-ups over the course of the game through either special unchanging drops or by checking the stage number. The latter is what Cotton 2: Magical Night Dreams does so that the powerful Light element weapon only appears in the later stages.
I'm by no means saying something like this is necessary, just pointing it out as an option.
Something else to point out is that usually power-ups come from designated enemies (either a unique type or a colored/flashing version of an existing one) rather than just appearing on screen.
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How many enemy types would you say is appropriate ? I was thinking of using entirely different enemy types for each stage and was trying to ration them a bit so that I don't run out of ideas by the later stages of the game.
This can change a lot between games. Like, I know Dragon Spirit's first stage has 10 (!) + the boss, and Akai Katana's first stage has more like 6-ish + miniboss and boss. But they also reuse some of those enemies for later stages. I guess something like 4 would be a bare minimum, but I think the real answer to your question here is to just hop on to YouTube and watch videos of a slew of games and see for yourself.
Unique enemies for every stage is something people praise precisely because it's hard to do, so accomplishing it by spreading your content thin won't do.
I wouldn't be too worried about running out of ideas for enemies, at least mechanically. I mean, enemies in oldschool shmups are often pretty simple in behavior, like "comes in, shoots, leaves" vs "comes in, shoots, kamikaze's you" vs "static turret that aims at you" etc. It's just all abstract shapes moving around and colliding, so even a minor difference like "shoots two bullets instead of one" can be enough to feel like a unique enemy type.
For this stage, something as simple as having some submarines in the water or some tanks/turrets on the islands could help, though... I guess that's military stuff and not "alien ship" stuff. Well, w/e, you get what I mean!
Do you think I ought to try and squeeze in a few more enemy waves as there are some rather lengthy pauses inbetween ?
Hm, I do remember there being a few weird pauses, but I can't remember where. Generally, you'll want to use pauses for these three things:
1) A bit of "drama" leading up to a boss or some other major event in a stage
2) After dropping a power-up, so the player can safely collect it
3) To designate that the player is entering a distinct "sub-section" of a level, kinda like the different rooms in a Mega Man game. These don't have to noticeably long.
Something to think about is "bonus enemies", which are enemies that only appear if certain other ones (usually a whole wave) are killed quickly enough. They're most common in "caravan" or time-attack styled shooters. I think the Star Soldier series has examples of this. It's a way of keeping pace in case the player starts being able to take out waves too fast, without just continuously spawning and overwhelming less experienced players.
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I'm wondering if there are any optimisations I can make to improve performance for you in 1920 x 1080 resolution,
I would be surprised if there was. I'm not kidding when I say that this computer really can't handle
most 3D games. Of course, it's also possible that it could and I just don't have some setting right because I'm computer-illiterate.
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A final note: When I played this yesterday, I used an arcade stick, and the game controlled as expected. However, grabbing these screenshots using keyboard controls, I noticed you're still on Unity's default way of handling axis input on keys, causing the game to feel like it has momentum. Like, 99% of people who play shmups want digital control where button on = full-speed and button off = immediate stop. I know Unity has an option to change this. Somewhere in the Input options there should be something like an acceleration value for the axis, which when set to the right value (like, max or something) will cause a key press/release to be registered as an instantaneous 100%/0% on the axis respectively.
, though.
