It's the future. This is Ayami Kojima's interpretation of what future fashion trends may look like. Though, yeah, Mina's a shrine maiden going to a shrine so she went in her ceremonial dress to be respectful or something. Hammer's just Hammer. But hey, it has a castle, it has a teleporting boss that shoots fireballs, it has a whip (though in Julius Mode, unless you count that Whip Sword), hearts and all that jazz. The only thing is that everything's shoehorned into Japan in the beginning. Fortunately, they all get sucked into THE SUN.