As for 720, I was thinking that since the controls have to be so darned precise, and that MAME handles the controls in it's own little way, one way to do it might be to go into the MAME code itself, and make your own private build to set up that one game to work properly for how your specific controller works.
I have no clue how tough that would be, and even then if it could be made to work right. It would seem that a mouse hack wouldn't likely work, because the directions are so un-specific with a mouse hack. It seems to me that it would definetly be impossible to avoid having it get out of synch with the direction of the little man on the screen.
I can't immediately picture the digital solution either, although... I don't know anything about this stuff, just thinking out loud I guess.
It would be really interesting to hear if anybody has successfully gotten 720 to work properly with MAME!