I restored a PC Engine a year or two ago and I also became fascinated by the hardware. The HuC6270 VDC/HuC6260 VCE graphics system is actually very flexible for the kinds of games the system was designed to play. If I remember correctly, it has background tilemaps, sprites, scrolling, 64kb video RAM, and a 512 colour palette. The hardware sprites/scrolling is what makes it feel more arcadey a lot of the time.
Given the 8-bit CPU it feels a lot more like a 16-bit system to me. The dedicated sprites/scrolling hardware instead of a more bitmap/framebuffer focused design meant things like shooters and platform games played amazingly well.
Soldier Blade, R-Type, Air Zonk, Bonk, etc felt amazing. Given the formfactor and the cool card cartridge format I can see why it was so popular in Japan.