Galencia's sprites are much bigger, so you can obviously add more detail. The smallest sprite in Galaga is half the size of a Galencia sprite.
But at that point they take up so much room compared to the overall dimensions of the screen it's no longer Galaga. In Galencia the swarm is virtually on top of you, it might look more like a zoomed-in Galaga, but it can't possibly play like it.
There are also less sprites so they don't need to use chars, and they have the advantage of not having to look like anything that came before so can be designed with double-wide pixels and the available colours in mind.
As I say, I'm no artist but I can't really see how you can make Galaga on the C64 look significantly better without compromising on gameplay.
If I were making a brand new IP like Galencia, built specifically for a 320 x 200 landscape screen as opposed to 224 x 288 portrait one, absolutely the graphics wouldn't be good enough. And I agree there are definitely elements from the arcade gameplay that I haven't quite captured yet. That's why for Galaxian I am porting directly the arcade code.
The choice is really down to chunky, less detailed sprites or no game at all. And there's no way I'm doing hi-res single colour enemies, this isn't a Spectrum ;)