What a great concept! This is such a great idea. I never really got used to the movement (the axis being fixed to 45 degrees from the camera broke my brain), but it was really fun to figure out the music mechanics.
Having the aim snap to nearby enemies is a really nice move that makes the bigger fights really interesting. The rage mechanic felt a bit like an after-thought to fit the theme of the jam, but it worked well with the rest of the game.
This idea could definitely be fleshed out into a full game.