Thanks for reporting. This is probably due to RAM, because as a challenge, I tried to shove a ~3MB game into a 2MB machine. :)
The TF card helps, but it seems to bring other engine-related issues (as I've watched similar reports from the other Scorpion Engine CD32 game released, SW Holiday Special).
Well spotted about the weapon fire on button release, it should be fixed in the build below. I also disabled preallocate memory to see if it helps with the stage crashes/black screen. And added a cheat to help your testing: "green" on CD32 pad will fill your health bar when pressed:
https://www.mediafire.com/file/pk27k6367onrj0b/CastlevaniaAGA_CD32_ISO.zip/file