Hahaha, you guys haven't figured it out. Alrighty, I'll upload something.
EDIT: I'm half-lying, I do mean getting five lives. I also mean having two red UFOs at the end of Stage 1.
I do mess up on Stage 2, so follow this crappy write-up while watching it.-You start with three lives and no UFOs.
-Before midboss Nazrin you have two UFOs, and two life pieces. The last fairy before Nazrin isn't killed immediately.
-At Busy Rod, when the UFO comes towards me you hover over it for a bit to prevent it from flying away, and from changing colors. When it comes back to you, summon the UFO and beat Nazrin.
-With proper timing, the UFO will fill up and explode at about the same point as a red multi UFO appears. You can grab both right away.
-You grab the last red UFO one or two fairies after the last UFO in the stage pops up. The UFO summoned will drop a red multi, and the last one will turn red at about the same time.
-Beat Nazrin, and you end Stage 1 with 5 lives and two red UFOs.
-Hover over the first multi in Stage 2 until the yin-yangs on the side appear. Kill the yin-yangs, grab red UFO. What I didn't do here was blow up the UFO when the fairies start shooting. If you do that, then you can grab both red multis easily.
-Next wave is different for other characters, but I just try to maximize the items I get for the next wave. The way I do this lets me grab items and have the UFO turn red as it gets to me.
-I mess up the next part. Summon the UFO, but kill the middle fairy before the UFO explodes, so the red multi flies toward you, and you get both stars. At midboss Kogasa, you should have six lives and two red UFOs.
-Get the next UFO, don't die stupidly like I did. You should have a life and a piece ahead of me by now.
-Pseudo-stream the purple shots and bomb at the center-left of the screen; the UFO should explode and the two red multis should fly right towards you.
Oops, I didn't follow my own instruction, so I die again, and swipe a green UFO by accident as well. Instead, obviously get the reds and attempt to fill and blow it up before Kogasa appears.
-Beat Kogasa. If you do everything right, you should have 8 lives and no more UFOs.