I think the instruction windows are huge. You could get by with smaller ones.
On the bottom of the panel, where you have the alien ship flanking the instructions on either side, I would replace them and the instructions with the alien ship swooping in as seen on the bottom of the original overlay:

One last thing - the player 1 joystick (left player) needs to have the joystick closer to the green ribbons in the artwork. It would match the white buttons. I'm sure it's perfectly centered, but it doesn't look like it.
I did a modified Galaga control panel recently. Here is a shot of it.

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