Yes, it's true, there are alot of sprites and they also move very quickly, which makes the whole thing not easier. But i think it should be possible on a A500, because even for the C64, a good Galaga port exists in the meanwhile, from Arlasoft. Of course not as good as the Arcade version, that's clear, because the C64 is a 8bit machine, but really well playable, i must say. Some 'tricks' were used there, because of the big number of enemies on the screen, but at last, it was implemented well (not perfect but well), which I would never have thought possible on a C64, because Galaga is not easy to port, especially for 8bit machines, i guess.
Sure, a 1-to-1 port of the Arcade version is a different story again, but a Amiga500 is technically much stronger than a C64 and there are alot of games there, running on a plain A500, that looks more impressive than Galaga. But you will definitely know more about programming on the Amiga than I do, i have only little experience with this. Interesting information about the Z80 and how it was converted.
Hardware sprite multiplexing could be a solution here, sadly i can not help (because Nekoniaew suggested that) in such points, since i haven't programmed a game on the Amiga yet, otherwise i would help of course. I only expressed my opinion on the game and things like the slowdowns can be mentioned, but that doesn't mean, that I think the port is bad. I think it's great, that you're actually doing the work, to port some of the best old arcade classics to the Amiga, and most of these ports are really good too.