I have spent around the last hour grinding UFO stage 5 lunatic, and I have discovered some very juicy things about it. For both my sake and for others, I'll compile the things I've learned:
Dodging in the center makes the intro attack much easier than dodging at the sides.
While it's preferrable to grab the two red ufos from the intro fairies and try to immediately grab the first UFO after that to create a chain that will get you an extra life before Nazrin, it is both safer and if done right equally lucrative to chain green UFOs instead. Perhaps chaining red UFOs in the first half and green in the second is the optimal method? More research is needed.
For the post-Nazrin spam, there is a quiet spot in the corners. This makes it much more survivable.
If timed right, dodging the final attack before Syou by hugging the bottom and sweeping from right to left can be pulled off consistently.
After the first loop of Spinning lasers, have the pentagram home in on the lower right rather than higher up. This makes the attack more, er, possible.
This stuff was TOTALLY worth skipping out on a good night's sleep. =D
EDIT: Confirming that the corners are a quiet spot. In fact, it trivializes the entire spam as long as you don't care about UFOs. I just captured the whole thing beginning to end without dying or bombing. THIS is what lunatic grinding is all about: Breakthroughs that trivialize a section once thought to be nigh-impossible with a limited range shot type like Reimu A.
