There are two counter/meters at the bottom of the screen-- One for Reco, one for Palm. You must have the C button pressed for the slowdown to even occur. That much does not affect either character's meter. What you do is slow down a bunch of bullets at once-- this is Mushi, so there's no lack of dense aimed bullet walls-- then press the A button to repel them. As far as I've seen so far, reflected bullets do not cause damage. What they do, instead, is cause a rain of yellow amber that charges the meter of the active character-- thus the reason why switching characters is important-- as your reflect field is powered by the inactive player's meter.
There are 2 methods of fire in Arrange mode-- unfocused (hold C) fire, and focused (hold A) fire. Unfocused fire will bring yellow/green amber items, for building the game's overall counter and each character's reflect meter, and holding A for focused fire will cause a constant stream of blue point items-- and that's where the major scoring comes from. Holding A will also keep a constant reflect of bullets, but this drains the inactive character's meter very rapidly. Also, while you're building your score in this way, do keep in mind that the output from reflected bullets is much smaller.
For example:
Say I'm playing as Reco with a counter of 3000 with Palm as the inactive with 1000. The overall goal is to get both characters so they are at 9999 at the same time. So what you do is wait for a good wave of bullets, and repel them. This will deplete Palm's meter-- and once that hits 0, he can no longer slowdown or repel bullets. It's important not to move while catching and repelling bullets, as moving will decrease amber point item output. The repelled bullets will cause a cascade of amber, which Reco will collect. Say she got another 3000 out of that. Now what you do is switch to Palm and put Reco as inactive, and now charge Palm's meter. It's good to know where the large enemies spawn, since they often explode into a full screen of amber, which is incredibly important. Once a character hits 9999, switch immediately. In this condition, they can repeatedly repel bullets in very small bursts, and will instantly return to 9999 somehow. Use this small-burst method to charge up the active character's meter to 9999.
Once both characters are at 9999, you activate 'Fever Mode', in which both characters' meters rapidly decrease at the same time. In this mode, all reflected bullets will cause a cascade of large amber items (instead of the usual small ones). Use this time to hold A and build your score, while reflecting as many bullets as possible. It's best to delay Fever mode for midbosses or bosses if possible, but keep in mind that pressing A (which is the reflect/repel button) will activate it.
Does that all make sense?