Take a look at this original arcade cabinet for Smash TV. You might notice that it's got four joysticks, two for each player. That's so you can move your guy around shoot the thousands of baddies that accost him in a direction independent of his movement. If I had to compare it to a less-ancient game, it's kinda like Geometry Wars.

But, like a lot of early arcade games, there was a version made for the NES, but if you've ever used a NES controller, you know that there just aren't nearly enough buttons to simulate two joysticks. Just can't be done.... with one controller.

So you definitely want to pick the second option on the Player Select screen, 1 Player 2 Controllers

That way you can move with one and fire with the other. Just be aware: you don't hold the controllers as normal, you rotate them clockwise 90° so that the Cross Pad is on top. That way it's much easier for your right hand to use it. Of course, for a better arcade-like experience, you'll want to track down two NES Advantage controllers and use them. But, you'd have to be pretty dedicated to the game to want to do that.