Few questions. Using the scorpion engine to program this? That's the rage these days.
Also, is this only for the purpose of making a demo? Or do you plan to take this all the way.
Yes, do Palma as a 'what-if' extended level. Doesn't have to be much. But it was always a bit of a letdown, and a cheat, that they simply blew up Palma just to cut corners and deliver a game within the limits of the deadlines and cartridge space.
If I were you, I'd borrow some elements from the Sega Ages version, maybe some of the cut scenes, to give this game a little more spectacle.