>>230590
>chatter
Hellsinker, Radiant Silvergun, Dariusburst CS and Silpheed (Sega CD) all have at least a little. Touhou games have a lot. Mamoru-kun Curse has a good amount if I recall correctly.
>optional objectives/paths, and characters reacting accordingly
The Darius series is built on alternate paths, but there isn't much in the way of character reactions. The KiKiKaiKai/Pocky and Rocky series has a good amount, as does Mamoru-kun Curse.
>rival characters with multiple incarnations
GigaWing has the black plane (who eventually becomes the true final boss if you 1cc), and Mahou Daisakusen/Sorcer Striker has Bashinet show up with bigger and badder mechs every couple levels. Touhou again, but usually across multiple games.
>varied environments with gameplay effects
Mahou Daisakusen again, with a level that floods, affecting your movement. Whip Rush has your speed capped low if you go underwater. I think GleyLancer also does it, but I'm not sure.
>more than one playable character
Mahou Daisakusen yet again. Touhou yet again. GigaWing again (there are even complete story paths with both good and bad ends for every combination in two player mode!). Batrider, Batsugun, Twinkle Star Sprites, Parodius, Gunbird series, Castle Shikigami, and those are just the ones I remember right now.
>audio or text logs for flavor
ThunderForce V and Hellsinker have a few unlockables along this line, but I don't think I can name any others off the top of my head. Maybe the R-Type Finals (astoundingly grimdark setting, by the way).