I'm a pretty big fan of the Soldier series, so I'd honestly love to do a Caravan mode. That's a definite consideration; but I don't know if I'll have the time to do it right, so it might just have to wait. Right now it's looking like it'll be:
1. Boss Rush - (self explanatory)
2. Wave Attack - Destroy endless waves that increase in score value and aggressiveness as you do better.
3. Tank Smash - Just kill lots and lots of tanks. Sounds boring, I know; but it's what I love doing the most in classics like Fire Shark, so I'd be making this mode strictly for me...lol. Of course there will be some hyper aggressive varieties not in the main game, too.
I'm still considering the TLB, to. I'm thinking you'll get to him by either getting a certain number of Perfect Clears (which will vary based on the difficulty setting) or reaching the end of the second loop; but I'm open to ideas.
Nice shot at the story, btw.

Awhile back, I kept asking a few of my friends to help me with something similar; but got basically no response, so I definitely appreciate it. I'll let you know if I 'borrow' some of your ideas whenever I get to fleshing it out more.
As for progress on the 2p mode:
-2p fire button from the title screen initiates 2p mode
-You can set both ships to 'autofire', allowing you to control both ships with only their respective directional keys (not bad at all for testing.) This works pretty good playing with a twin-stick gamepad, although you could just as easily set the triggers as the fire buttons.
- combos and wave completions are counted and totaled separate now. Waves are a bit harder to complete.. a player has to kill every enemy within a wave themselves for it to count, so I will probably make them worth 2x or 3x their current value.
- bonus jewels now give a set value rather than one based on the current combo. I might change it back to match the appropriate player's combo to encourage a little competitive deviousness, though.
- right now, continues are shared, with the losing player sitting it out until the other one's game is over. I'll probably change this for normal 2p play; but given that it's more convenient for playing dual style, it'll probably stay in one form or another.
@S20-TBL
Yeah, the DVD cases are looking like best option. I have looked high and low for the unique ones the AOL discs came in (think of a Nintendo DS case dimension wise) and all I can figure is they had them specially made for that purpose. I figure the only chance I'd have getting some is phoning a factory in China somewhere...lol.
I'm still waiting to hear back if my friend's printing connection can do DVD sized materials, as well as how much they would charge before I run out and buy a bunch of cases I might not end up using. The site suggested by renardqueenston (which only offers CD packaging at the moment) is still a possibility too.