Looks extremely charming and plays well, I love it.
A couple of thoughts about the mechanics: I feel like the piercing railgun is fairly useless, as it seems to leave you unable to attack (and requires you to beforehand) for a while and only does the same damage as a single normal shot. It pierces, sure, but it doesn't seem worth it. I feel like you could easily buff it a little and maybe compensate by adding a delay to the fire instead (with appropiate s/vfx for it). Enemies overall could also use having less health. Also, please make middle mouse rebindable, it's typically an awful input to execute and my mouse fails to do it 90% of the time. I tried looking into the settings but I'm fairly sure it's hardcoded/not using these settings.
Speaking of the settings, I had a pretty bad time trying to set it at a nice resolution. Gave up in the end. I don't think this is really your fault or that most people will care (and maybe the CRT mod would've done some nice things already), but I @d you in discord if you want to read about it.
More things about the gameplay: I feel like it would be nice if the turret would start rotating once you look towards "the other side", even if it's not an "acceptable angle" it can rotate to. Basically, if, say, its max rotation is 90º to one side, then looking at 100º on that side because you switched while looking back should already make the turret rotate, considering it takes time to do so.
Hitboxes feel a tad larger than they are, at least for the player's hovercraft. I've seen a few enemy boats go out of bounds but since it seems they go back in upon dying, this doesn't seem to be an issue and I'd actually leave it in if it's not already intentional.
I think I'd make the dash work even if you're not holding a movement key, provided that your hovercraft still has some velocity either forward or backwards.
It took me a good while to realise that letting the charge bar fill up makes shots be faster. Maybe the sound should be swapped with something slightly different?
I've seen some enemies getting stuck for a bit too long on islands; maybe their turn rate could be increased for a bit when that happens, or have them move in reverse?
Also, on the first level, I thought that was the entire span of the demo, so until I read someone else say there was a level 2 I thought I was done with it. The "survive" objective text could probably be changed to something like "destroy the enemy fleet" or so, to clue you in on the enemies not being endless. Overall, the dialogue was pretty funny!
All in all it was fun and I'm looking forward to what you do with it next. I think it could be fun to have some level objectives like taking care of coastal buildings or such; you could have them sit on the side of islands and be destructible, maybe even have stationary turrets that way. Stuff like hovercraft customization, swapping parts with stats or so, could be fun too.