I think the two main gameplay loops are solid and works well together! With additional mechanics and a perhaps more fast-paced Phase 2 this could be a neat game to sink a few hours into. I really like all the art assets as a lot of care has been put into the aesthetics of the world as well as the menus.
That being said, I find the choice of The Entertainer metal cover as the Phase 2music to be very intriguing as its source material doesn't sound like something that goes hand-in-hand with the gameplay experience, and the genre feels too heavy for the colorful aesthetic. I did like some of the sound design, but in particular I feel the sound effect for shooting could also use a bit more oomph to make that experience feel a lot better.
Otherwise this is a very cool game! Congrats on finishing it!