Demonic Spiders: The spiders were bad enough in Centipede, it's worse with several coming for you at once.
Designated Hero: The original plot given by the game's arcade flyer (here) made the protagonist come off as a lazy, incompetent, Manchild whose selfishness doomed his kingdom. Evidently the developers realized this, because all home console ports of the game switched to a variation of the "Guy gets lost in Enchanted Forest" plot that was previously used in Centipede, just with an archer instead of a wizard.
Sequel Difficulty Spike: Thanks to the increase in enemy quantity and variety, this game serves as a heart challenge for those who mastered Centipede.