Okay, no more extreme blanket statements from Spooky without explanation, here is how these games actually play and what the differences actually are.
This will only cover the in-game stuff. Lots of cinemas are missing in the Mega Drive version, but what it includes is arguably the best of any 16-bit cartridge game.
General differences:
The PC Engine version has voice acting before each boss battle.
The players sprites and scrolling move much slower in the Mega Drive version.
In both the MD and PC Engine versions, the player sprite won't jump until fully landed. Slashing also requires timing. Both are fine soon after adjusting and suit the gameplay/stage design. While performing a series of consecutive jumps, for both high and normal, I missed more in the MD version, but it really does seem to just be a matter of getting used to not hitting jump again until you land.
Horizontal jumps seem harder to pull off in the MD version and the jumps look longer in the PCE version, but it's difficult to tell because of the slow speed of the MD version.
In the PC Engine version, if you use the full power of Yuko's sword slash, you cannot swipe again until the first projectile disappears or hits something. If you do this on an empty screen, it may seem like there is a delay between your first swing and a continued rapid swinging afterward, should you rapidly continue hitting the sword button. But in an actual gameplay situation, if you are wildly slashing at an enemy without strategy, the first projectile will reset upon impact, followed by consecutive slashes. If there is still distance between you and the enemy during the second slash, as it approaches you, then the time between impact and triggering the next slash with only be shorter. If you aren't timing your swings effectively and are just button mashing or using Turbo switches, then your attacks will always shoot the shortest projectile.
In the Mega Drive version, the sword slash projectile travels faster, but there is still the noticeable delay between a full powered slash and a consecutive fastest/shortest slash. Unfortunately, the MD version cuts off your projectile slash altogether should you button mash. This leaves your rapid swings completely useless until an enemy is already within collision distance to hurt you. Rapid fire in the PCE version still produces a projectile just long enough to hit an enemy before they're already walking over you.
Example: the very first fire breathing enemy of the first stage. If you are against the wall and facing the enemy and slash rapidly, you will not hit it, even though you and you sword swing are directly in-front of it. Rapid firing in the PCE version would damage an enemy that is further away than this.
MD: players share palette, HUD, explosions, misc enemy attacks and icons/powerups all share from same palette. This translates to flesh-colored explosions, lower-shade yellow coloring in-place of golden coloring on objects, some fire effects are just yellow. Yuko and Valna may be twins, but Cham takes a brutal hit using the same skin tones. Cham's sprite is also censored in the Genesis version.
MD: Player can turn left or right while crouching. Since the game wasn't designed around this being a feature, it doesn't have a use in the game, other than attempting to position yourself dangerously close to a static enemy. But chances are you will not be able to safely hit the enemy from that position because of the sword slash issues.
MD: It feels weird having to reach up to the start button to continue text and you'll often end up pausing and un-pausing the game a few times after each text segment finishes.
Holding down to slide feels most natural and should have been down + jump, while descending from platforms should have used an alternate command.
City Stage:
The thrilling bgm of the PCE version is slower and unenthusiastic in the MD version. The slow pace better matches the slower pace of the game, but it also lacks the intensity of the original and just feels unenthusiastic and more just obligatory. You can actually hear how the imaginary musician is struggling to pull off the solos.
Both have a gibberish far background.
PCE has mid-sized buildings and animated fiery sky.
MEGA DRIVE CHANGES:
New layers of parallax. Looks particularly nice in the first short section, where Yuko runs along in her pajamas.
Even though Yuko's pajama sprite is used in an isolated section, it still suffers from taking colors only from the shared player sprite palette.
While falling to catch the Sword of Valis, the skyscraper on the left looks like it's made of stone in the MD version.
Lots of lost color and variety in bg.
Water towers take a big hit and look too much like the background, as if it is missing vertical strips.
New enemy layout.
Blue insect moves slower.
Fire-breathing enemy's fire attack no longer looks like fire and is just a generic yellow taken from Yuko's sword slash colors. If you attack while ducking beneath the "fire" attack, you will take damage. Combined with the rapid fire issue of the Genesis version, this leads to you taking damage before you get a single projectile hit on the enemy, before you go back to swinging your sword hitting nothing but air, until you take another hit and repeating until one of you dies first.
Boss adds new difficult-to-dodge attacks, introducing "bullshit" moments. Nice graphical additions to the boss.
PCE version has a better neon sign with much more light animation and color.
Supposed to not be a real stage, so it's a waste to update the boss but not extend the stage, considering how much content is cut overall compared to the PCE version.
PC ENGINE EXCLUSIVE STAGE 1: Cliffs/Waterfall:
One of the nicest looking stages in the game and one of my favorite to play. Very nice color cycling effect on the waterfall.
Forest:
MEGA DRIVE CHANGES:
The bgm of this stage probably holds up second best compared to the original. Still loses that nice motivational pacing, but not tired sounding like the previous stage's bgm.
New layers of parallax, particularly effective in the forest segment. Some background assets are missing and some new ones are added and everything is touched up to balance the increase palette sharing. Looks very nice overall.
The insect enemy looks literally unfinished on PCE. It's very nice seeing it completed in the MD version.
The lake section is a pointless waste of space. Very little happens here and it was the kind of superfluous thing worth doing in a CD game. The artwork is very nice, but this and the forest section should have been greatly expanded or cut so that a proper gameplay section could have been included.
The lake section background takes a hit in color and shading. The (flesh-colored) boat, tower and boatman look unfortunate.
It's cool that the boss is segmented and flies around. Unfortunately it flies straight into the boat and introduces lots of exclusive "bullshit" moments as it is un-dodgeable and falling off of the boat means death. The boss also takes clashing shades from the background.
Tower Stage:
MEGA DRIVE CHANGES:
Blue background now scrolls independently. Some nice line scrolling during the brief horizontal segment.
Noticeable color recycling overall.
Insects added from missing stages lead to new "bullshit" moments.
Boss is even simpler than the PCE battle, but very nice upgrade to the artwork. Simplified fire columns.
PC ENGINE EXCLUSIVE STAGE 2: Aqueducts:
One of the nicest looking stages in the game. My favorite to play.
BELL RINGING:
MEGA DRIVE CHANGES:
Very nice variation of the bgm. Not as effective as the original, but doesn't feel too sedated either.
Why include these assets but not the stage?
Background and bell lose shades/color. Door no longer has its own palette. Neat that they used the alternating brick shades seen in the missing stage.
RAMP:
MEGA DRIVE CHANGES:
As with the rest of the soundtrack, it uses some nice Mega Drive sounds, but the best way to describe this take on the original is "sleepy".
Nice background addition with parallax to this superfluous section which also should have been cut.
In the PCE version the coin enemy's back says "TEAM RED ALERT". In the Genesis version it says "TELENET JAPAN".
Boss background is missing the stars.
In the following in-game cutscene, the background earth artwork is very nice, but a waste that it is different than the final boss battle background's earth artwork, since space was such an issue.
MD EXCLUSIVE STAGE: Robot Factory???
Bgm is solid, but way too slow.
Painfully generic "look I'm 16-bit!" background and stage. Lots of wasted space, meaningless platforms. Would look more at place in Ranger-X, but the minimal assets would only make up half the screen. Anti-Valis theme is an excuse to use the same simple palette on "robot" enemies.
Sliding background is distracting while trying to make out actual movement and platforming. Leads to plenty of "bullshit" moments.
Boss loses crucial sandpit mechanic, leads to unavoidable "bullshit" moments.
PCE EXCLUSIVE STAGE 3: Graveyard:
Lots of nice art and nice addition to the game's overall variety and a very-Valis theme. Plus, Rogless!
PCE EXCLUSIVE STAGE 4: Desert
Not polished enough visually, but fun to play and has some cool stuff like the giant rib bone platforming and sand pits.
ICE STAGE:
MEGA DRIVE CHANGES:
This bgm holds up best compared to the original.
Nice use of parallax, similar to the forest stage. Best background in the game as far as maintaining the color and shading of the original.
Snowflake enemy a nice addition, but leads to new "bullshit" moments. Particularly, the floating platform segments with spikes to leap over, while dodging both flying enemy types. Especially with Yuko's short slash in this version.
Missing the destructible ice blocks.
Boss's attacks are now massive unavoidable rapid fire sprays, huge jump from zero "bullshit" moments to constant "bullshit" moments. You pretty much have to just take damage to do damage and it's a race to the finish. Seems to be the origin of the poorly thought out short rapid slash. It may compensate as a defense, but you still fail to damage the boss when you use it.
RED TOWER:
MEGA DRIVE CHANGES:
The sounds used for the bgm are solid yet again, but this track is painfully slow, even for the pace of the MD game.
Disappointing downgrade in "foreground" artwork, but nice upgrade of artwork to far background.
The use of column scrolling in the vertical background breaks the parallax. The horizontal parallax was also a bad idea.
Enemies use generic looking shared palette, like System-16 Golden Axe, but they made very good use of it considering. The yellow worms using the player sprite palette is disappointing though.
Extra red enemies against the red background equals poor contrast.
"Spiny" from Super Mario Bros is missing.
Missing skull platforms.
Missing destructible blocks, but adds static foreground columns at the end.
FINAL BOSS BATTLES:
MEGA DRIVE CHANGES:
Very nice updated artwork for the Earth and Moon.
During the second form, the background only scrolls one direction horizontally. In the PCE version the background scrolls very fast in all directions.
FINAL BOSS 1st FORM:
MD: Moves towards you, while flame swords fly towards you all at once and cannot be dodged. Rapid slash can be used as defense, but you must take damage to do damage.
Shorter sword slash is super fast and flies along the floor. You have to jump over it before it appears to avoid damage. Way more "bullshit" moments.
PCE: Giant sword slash and medium sword slash, both of which you can slide under. Flame swords can be dodged or destroyed as they come towards you.
FINAL BOSS 2nd FORM:
MD: Same attacks, flame swords are now extra "bullshitty".
PCE: New dodgeable orb attack replaces the flame swords. Single type of tall green sword slash.
Bottomline:
PC Engine/TurboGrafx-16 versions have better controls, gameplay, stage design, more stages, more variety, better coloring and shading, faster and better pace, better music which compliments the faster more intense gameplay, more and better cinemas, voice acting... and most important of all: massively fewer "bullshit" moments.
The overall stage visuals are a mixed bag for both. Each have better artwork for some things, but not others. The MD/Genesis version has good parallax in most places but most of the sprites took a hit in color/shading and the best background visuals belong to PCE exclusive stages.
I've been arguing for years that the Mega Drive/Genesis version is under-appreciated, more polished and that they made a lot of nice additions to compensate a bit for everything that is lost. It still is a great game with great aesthetics and one of my favorites for any platform. But after taking a close look at both versions, the TurboGrafx-16/PC Engine version is much better in comparison than I previously believed from just playing one or the other every so often. It's just too bad that the PCE version didn't get that final polish that the MD version did. Still the definitive version and the most enjoyable, no question.