I think LJN had more to do with the licensing than the actual creation of the game. Beamsoft made BTTF II & III for the NES and they jacked that one up pretty bad too....a guy with a huge pomp haircut and a blue mechanics suit running amidst Super Mario Brothers rejects and Lakitu's deformed children? Of course, 1 is not that much better either, would make more sense for the game to be about Glen Danzig going on a violent rampage across Hill Valley for a beer!
If RARE had done it, it would have likely been very freaky, I find RARE's character art, particularly in the W&W games, very freaky, and their soundtracks can be pretty crazy too. Remember the water elemental from Ironsword......it's like intoxicated sonic ramblings of a crazed Jazz guitarist with a pension for 7th chords. Just what we need, a 16 tile high Biff Tannen spitting DeLoreans at Marty while Marty tries to fight back with a badly rendered Gibson ES-335 guitar with limited attack range from the headstock.