As you start this level, you can try out your new Thunder Sword on the giant amoebas floating around. The Hunter weapon works marvels in this level, as you will be attacked from all sides by robot fish, stingrays, more amoebas, and a few weird things with arms. Stay in the water at first, then when you reach the first large chunk of ice sticking out of the floor, you can either go through the rest of the level at the top or bottom of the screen. If you decide to stay at the bottom (which is the easier route) you will get to a point where a bunch of amoebas have bottlenecked at a small channel. Blast them out of the way with the most powerful forward weapon in your arsenal, and try not to run into the walls. If you decided to stay up at the top of the screen, you will end up going through some tight squeezes, but you will get a shield and a 1-up along the way.
The mini-boss is tougher than the real boss. It will fire eight small lasers outward from itself, and when you destroy it, one of the canisters surrounding him will make another one. Stay near the surface of the water and watch for a claw item. Once it's down to four canisters he will finally blow up for good. The level boss, Spark Lancer, is right after this guy, so be prepared. At first, fire at his arms like you did to the Hell Arm, and avoid his forward charges. Use the Thunder Sword if you have a claw, as it will destroy one of his arms in two or three hits. When you are behind him, he will fire spreads of bullets and some energy balls that split into four smaller energy balls. He will sometimes fire a long spread of energy balls forward, and it is easiest to avoid this when you are above him, so if you see him hold a crackling energy ball between his arms get above him quickly. Once both arms are gone he will fire energy blasts up and down when he charges, so fly past him quickly when he moves forward and get in front of him again as soon as possible when he backs up. After taking a little more damage to his head, he will begin to melt and fire a vortex of four energy balls around himself. Blast away until he finally dies.