Telaris--In order to unlock a level for practice or conquest mode, you have to beat on one credit. Just completing doesn't count, which sucks. The fourth stage is the one I need the most practice on as I can get through the first three stages on barely credit only to have that streak fall apart on the fourth stage.
Gup--The difficulty depends on what you want out of the game. As others have said, free play will eventually unlock itself after several hours of play time, so getting to the end is not a problem. I think the real meat of the game is the challenge mode where you try to score the highest amount of points on a normal, 3 ship, one credit game to get a net ranking. So if you are interested in trying earn a ranking, then this game is more than enough challenge. There are some truly gifted Ikaruga players to compete against on the net ranking.