NiGHTS is pretty fun already, but I think it could have some things altered to make it a more balanced experience.
First i'll talk about what the NiGHTS special stages do right. The first three stages have no hazards, or anything that will hurt you and reduce your remaining time. The 4th stage, Cavern Fortress, first introduces hazards, such as the moving chained spike balls, and the moving bookcases. The 5th zone, steps it up with pointy cacti everywhere, but they are static and do not move. The 6th zone has the floor and the roof covered with lava, and then lava moving up and down, making it quite the hazardous stage. And then special stage 7 has crushing floors, lasers, the spinning laser fan of death, and the minimizer (which turns Sonic small). And of course, the amazing music.
It also commonly encourages use of a power-up, such as the Super Paraloop, or the Nightopian Helper.
I believe that the first change that could be made is the time. The time isn't a pressure or anything. You start with "X" time, much lower than the original time. The first stage can still be easy, but I think this will balance the special stages and make them actually ABLE to be failed. Anyway, when finishing a loop, your time would go up by "X" amount. Suprised this isn't already implemented, as this is already implemented in mares in Alpine Paradise 2. I believe the reason you're given this much time, is because it would be impossible to do multiple loops around the level with littler time. But if time increased only when you finish the loop, then the challenge would be more balanced. Challenge shouldn't only be getting the best rank, beating the stage should also be challenging... at least a little bit. That and getting hit doesn't really matter in the long run in stages so :/
The second alteration, is NiGHTS power-ups should respawn after a loop. Some level design encourages use of it, and it would probably result in a more fun experience after the first loop. Anyway, to counter it lowering the challenge of getting higher ranks like "A" and "Rainbow A", the score required to get better ranks will be increased.
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Some other things I may suggest would be
Super Emerald NiGHTS stages. Most of the NiGHTS stages are easy to beat... for me and many others at least. These stages will be much harder, like the Sonic 3 & Knuckles ones being very difficult to beat. The first 3-4 stages can be the same difficulty or harder than Egg Sattelite, and 5-7 could even be as hard as Black Hole. Beating each one would net you a Super Emerald. It would also make Hyper Sonic exist, as you know... he's been dead since Sonic 3 & Knuckles D:
(Black Hole could be a part of these super special stages too)
I know making NiGHTS special stages are hard, so I don't know if this will ever be in, but it's a nice idea.