Well my game is top-down view and has no jumping, A is for shield and B for attack. If I was porting this to the C64 I'd probably have to remove the ability to shield, which in turns would make significant changes to the gameplay.
You can't shield and move at the same time (otherwise the game would be a pushover

), so pehaps support for those special 2-button joystick could be added. However, I don't know any C64 game that REQUIRES those joystics.
The other option is requiring 2 standard joysticks (for 1 player) and use the second one only for the button, to shield. However, that'd be almost as ridiculous as having to press a keyboard key to shield.
I don't think UP for jumping is a problem with joysticks, in fact it's pretty much a standard. HOWEVER with a controller, that's a no-no. It's a huge difference, with a joystick you just move your wirst up, however with a controller you should move your left thumb up which is much more tiring and harder to do efficiently.
As for sprites, it's without a doubt the worst to port. The best idea is to have monochrome sprites for black (or whathever colour) outline, and use multi-coloured sprite with lower priority for the texture. If a few textured pixels are off it's no major problem, and you even have a 3rd colour to compensate. However, the sprite's size total mismatch between both platform is a major issue.
The background is not much better since your working area is 40x25 tiles instead of 32x30, this implies a lot of changes. In fact I came to the conclusion that moving the status bar to the left or right of the screen (to keep the 32x24 tiles "screen" of my game intact) would be the only solution without re-designing the entiere levels.