Yeah, I'll put the source on github soon with the level compressor. You just put the levels on the disk as E1MX. The compressor will map the unimplemented enemies and items with a text file to define the mapping. So yeah, you could use WDC or WolfEdit or whatever you're used to.
For the fast mode, the game uses a CIA to accumulate keyboard movement, and deltaTime based weapon and enemy updates, so it should work if the CPU is sped up. But that's all untested.
I might take a look at mouse input, since I can emulate it in VICE. Is the 1351 the standard people expect?