I've been thinking about Killer 7s shooting sections (which I haven't played), and come up with a neat idea. What if we were to modify the focus of normal lightgun games which rely on threatening the player character's health. Instead we were to put the player in front of a battle scene, with two or three different sides fighting each other. The player is on one side and the are set back from the fight (like a sniper). Depending on who the player shoots they can help to turn the tide of the battle and help the characters get to their objective (ie. like blowing up the enemy base). Unlike a normal light-gun game, it wouldn't be a cut and dried case of preset baddies and attack patterns but would be more of an emergent system where each character would be able to make a difference to the flow of the battle. Ie. They have a better chance of making it if you help them to survive to work together against the enemy.

This sounds interesting. A neat dynamic to add might be giving ranks to the soldiers and assigning leaders. So you could shoot all the officers on one side, leaving them weakened considerably, then turn your attention to shooting the foot soldiers on the opposite side >:) So it'd be a Few Red Officers vs. A ton of leaderless Blues :D

An interesting idea. It sounds to me though like you want to remove any personal threat to the sniper, although I might misunderstand. If that's the case, I don't think the game would be all that fun.
In addition, if you want the action to be dynamic, the greater the affect you have on the battle, the bigger a target you should become. If you shoot all the officers, people should start gunning for you.
It would also be neat in this case to be able to move. In terms of an arcade light gun game you could include a joystick and maybe a jump button so you could run to various locations in the level. A good sniper keeps moving as once you've fired your shot you have to assume that position was given away.