The visual glitches and non-playing CD music are engine related. Similar issues were reported on SW Holiday Special released by the engine's author himself. All I can do is to switch engine versions until it's mitigated or solved. Meanwhile, I did the version below using a different version of the engine, to fix a problem that appears on world 5 (it worked). It is not CD32, just normal A1200, but you can play that as well if you have a TF card on your CD32. Thanks.
https://www.mediafire.com/file/pk27k6367onrj0b/CastlevaniaAGA_CD32_ISO.zip/file