Cotton 2: Magical Night Dreams

It was originally released on the arcades by Sega (actual it was developed on the new Sega's ST-V hardware in 1997) and months later, it received a virtually arcade-perfect console port on the Sega Saturn. You control a cute little girl (named Appli) or a cute, scantily clothed witch (named Silk) on a flying broom (oh yes, it supports two-player cooperative game!). You attack with normal shots and power attacks to your front or either flank. You may also use "spells" in emergencies. By defeating enemies you get some yellow crystals which you may use to strengthen your firepower by increasing your "experience level". Be careful though as you lose some of your experience level when you get hit. Oh, you can also shoot on these yellow crystals before collecting, in order to change their color and increase the desired elemental power (those powers have a large effect on gameplay)! Rather than just dodging bullets and moving into known positions, the game gives its unique sense of realism and playability that is unusual among shoot em ups.

The game has gorgeous graphics and nice music. The great thing is that they look even better in motion. The graphics have some of the most beautiful and bright colored background drawings I've seen on a Saturn's classic 2D horizontal shooter (though slightly pixelating at times)! The animation is excellent too. Most of the background graphics are non-static and this makes the game more pretty.
The sound is also very good, featuring great digitized sound FX and catchy PCM/synth music scores along with arcade-style SFX.