I have to struggle to remember this. I have a copy of the game, not sure which Atari console it's for though.
The Atari console versions let you play with either one or two joysticks in either one or two player mode. With one joystick/one player, you run with the stick and fire with the button in the direction you're facing. With two joysticks/one player the left player controls running direction, the right player controls fire direction. With two players, it will play in either mode depending on player preference.
So the short answer is, yes.
Unfortunately, I can't help you to set up EMU7800 though. I don't really play the 7800 very much.