Ahh, *the* game that got me interested in Mame.
I don't know how many times I've played that game through now, but lately I usually just quit when I get upto Goro, as I don't think the game's much 'fun' past that point.
Anyways, I generally try and stay in the air, leaping in for flying-kicks and whatnot, and then leaping out *immediately*, just basically try and let the only time you're in close be when you're kicking him. It's been a while, but I think Sub-Zero's freeze helps a bunch too if you can land it. (Sub-Zero junkie)
Oh, and luck, luck helps too.