Yeah, the town defense part of the game feels really tacked on. You could do a lot of the other stuff in the original title -- control where your people built, destroy old sections of town as the civilization level went up (which allowed you to increase the population more and potentially get enough "town experience" to level up again). I like the fact that faith from quests, and not just population level, is the metric for leveling up, although even then it does reduce the need for the town building. Why craft the town more specifically when eventually you're just going to get all the EXP you can from quests and then the town doesn't need you anymore?
I also though putting little action sequences in the demon portals was interesting. I didn't hate that as it did help to break up the pace some. At the same time, though, I really dislike that you can't just go and take out the portals and focus on the town building. The structure of the town building is so regimented that there's no improvisation to be had. The pace is all wrong, made only worse by the town defense sections. I didn't think "more features in Actraiser" would be a bad thing after everything they ripped out of Actraiser 2, but this game just doesn't have the right balance to its new features.
The one change I fully support, though, are the enemy drop-crystals. Those made fighting and killing enemies in the platforming sections more interesting, and the bonuses were nice. Otherwise, yeah... as pretty as the game looks and sounds, there's a lot that doesn't work about this remake.