The best arcade games like Gunstar Heroes are Alien Soldier, Contra III: The Alien Wars and Metal Slug 3. Below are 11, each with the reason it is here — and, at the end, what filtering to arcade costs you.
Filtering to arcade means you want short runs and a score, not a campaign. It is the right filter when what you liked was the one-more-go feeling.
What you get: A complete experience in twenty minutes, and a skill you keep. Arcade design is measured in the moment after you lose.
What made Gunstar Heroes worth playing in the first place is covered on the full list. This page is the arcade part of that answer, and only the arcade part.
Treasure again, harder and faster, and the boss design is relentless.
The other peak of the genre, and the better-balanced of the two.
The most generous run-and-gun ever made, and superb in co-op.
Made specifically to be this era again, and it succeeds.
A polished modern arcade run-and-gun with great co-op.
Destructible run-and-gun chaos, four players, very funny.
Treasure's shooter, and the design people still study.
Treasure in three dimensions, aiming and moving as separate jobs.
Treasure's brawler, with three lanes and multiple endings.
A modern shooter made by people who studied Treasure closely.
Same console, same refusal to be like anything else.
Story and progression. Arcade games repeat on purpose, and if you want to be pulled somewhere they will not do it.
Specifically, these are strong answers for Gunstar Heroes that are not arcade games, so they are not on this page:
The full list is on games like Gunstar Heroes — 12 picks, no genre filter.
Alien Soldier. Treasure again, harder and faster, and the boss design is relentless.
No. Gunstar Heroes released on the Sega Genesis, but a recommendation is only useful if you can play it, so the picks above span platforms and eras. What they share is the genre and the reason.
They were designed to end. A machine that let you play for an hour on one coin did not earn its floor space, so difficulty was the business model.
Constantly, mostly by small teams. Several of the best beat-em-ups and run-and-guns of the last decade are new games built on forty-year-old design rules.
By hand. Each pick was written for the full Gunstar Heroes list first, on what the game actually does, and this page is the part of that list that is arcade — never a genre tag lookup, which is how "best racing games like Super Mario 64" used to be a page on this site.
Or read the arcade guide for where to start in the genre generally.