Cool game and concept and this could probably be a really good party game. I really like the arena and the visual effects that are there (also pingu is very cute). A few suggestions I have:
-Maybe slow down the player when the player is aiming, this may take away from the limitation, but it'll make the gameplay a lot less chaotic because currently sometimes its just hard to control where the character is (This applies mostly to one player).
- Currently if your penguin is at the very front of the screen it can be hard to see it, if possible(I use Unity so its easier for me) 3D models, or shift the playing field/penguins slightly backwards or angle it.
-Powerups or other ways to influence gameplay to add more variety to gameplay.(Might take extra time)
Pretty good submission with a good amount of potential for a little further expansion.
Good luck with your game :D.