Ghouls and Ghost was an interesting one... because even though you could keep buying in to continue... you still had a Really difficult time beating its levels. Starting each level from the beginning worked well for this game... but not so much on other games... such as "R-Type".
With R-Type, and many other poorly balanced shooters... once you lose your powerful weapons, and get placed at the beginning of a nightmare tough level (that was designed to be challenging with a powerful weapon)... it can be nearly impossible to get past them.
I really LOVE what they did with the Sega Genesis shump "ThunderForce II"...
If you die, the screen still continues to scroll.. and places your next ship on screen, partially invincible for a moment. No restarting levels from the beginning... so you keep the flow and difficulty balanced.
The game gives you a set number of continues... I believe 3. And you can choose to start out with 5? ships per set.
If you are not that good... you can blow through all 5 guys on a single level. Or maybe lose 3 on one level... then 2 on the next.
This allows you to see and experience the levels far more deeply than other shooters... and yet, if you are not skilled enough, you will not be able to get past a certain stage due to using up all of your continues.
The game has 3 difficulty levels... but, you can only beat the game on hard mode I think. The easy mode will only let you play maybe half of the games levels. The med. mode I believe will let you see everything except the final level or two.
The game also has a hidden options menu: A+B+C+Start And you can choose to start on any of the first 5 or 6 levels. This helps when you want to practice certain levels.. and or if you want to skip the first few levels.... to try to beat the game with a bit less time and challenge.
It took me some time to beat the game, and to date, I only beat it from skipping the first few levels. Its my favorite Shump hands down.
One day I vow to try to beat it without skipping any of the levels.
Also, Id love to try my hand at beating the X68000 port too.
(The Genesis version has less graphical detail, and fewer stages. However, the Genesis version altered one of the end stage bosses to be far more difficult to beat than the x68000 boss. That was probably to make up for having less levels in total. My god, that boss was nearly impossible! I had to sort of cheat.. hitting the start (pause) button rapidly on and off, creating my own version of slow-motion, while playing, at the same time... and even then.. I still had trouble beating it! heh

)
Side note... that a lot of people didnt like TFII because of the Top view stages. Personally, I liked the variation they provided... though I admit, they were a little flawed. The biggest problem with them... besides getting lost trying to find the bases... was that I, and many others... didnt realize that you had to be in a certain range to hit the bases targets. I did not notice that you shoot two kinds of weapons out of your craft at once... 1) Typical Air Weapons to take out air-based attackers... and 2) Bombs, to take out the base turrets and bases.
The bomb graphics are like small circles... and not quite intuitive to how a bomb typically would look.. plus they were masked in with your typical fire... so unless you actually read the manual... you probably didnt know you had bombs... and wondered why it was so difficult to hit the base targets accurately.
--- Continues, Value, Challenge, and Skills ---
Overall, I was never a big fan of Arcade based continue games. They typically tended to be "Cheap", making it nearly impossible to survive in certain areas, just to eat your money. It also gave far less a feeling of accomplishment when you "won".
Its like buying a Black Belt... rather than going to class, gaining skills, getting beat down, and then eventually, winning matches.
When its bought, rather than earned... it becomes a meaningless and hollow victory. IMO, this is one of the main reasons, that the arcade industry fell.
The Elder games kicked your butt, ...But that only made you want to try to get better, to get deeper into the games levels.
--- Coin Psychology ---
I also agree that putting in actual coins is a special thing. In a way, it is like a miniature form of Gambling. Your coins were precious, and in most cases, in limited quantities. Each quarter, you were gambling your coins for longer life... or essentially, longer entertainment duration.
Because the coins were limited... each life you had, was treated with Far more serious intent. You focused was amplified, as were your emotions. Actual Adrenalin came into play. It was almost as if you were actually the character, fighting for real.
As a kid, it was also kind of special... because it made you feel like an adult. You were given your own money... and could choose how and where to spend it. A power that kids do not often have access too.
This is why games like Monopoly still hold such captivation with kids. The power to earn and wield currency.