Thanks for the feedback! In the post-jam version I've started working on, lower difficulties will have lower projectile speeds.
Unfortunately I can't widen the camera without redoing the UI, as the game is 320x240 and then scaled up to 960x720 (so to make the ship smaller I'd have to use a different resolution).
Removing ship collision damage could work on lower difficulties, but because a couple of ship types don't fire projectiles they would become effectively worthless. Hopefully the slower projectiles, fewer enemies, and improved controls will be enough. :D