If you follow through with this, the most important thing you can do is make sure that the placement of everything is just so. If you don't get this right on the firsts pass, either the whole thing will have to be readjusted as necessary, or redone completely from scratch.
This kind of project is of no long term value unless you completely replicate the original as a historical document. Only after you achieve this end can you even think about preparing alternatives. It would be socially irresponsible and disrespectful of the source material to do anything less.
That said Shadow Tower is the best game to remake first with SOM. SOM is actually based on Shadow Tower, you find much of the artwork is only slight modifications of those of ST. The arm is straight out of ST. The way the maps work likewise.
You shouldn't call this HD. Just Sword of Moonlight - Shadow Tower. The truth is the game would be perfectly presentable if made with the original artwork. Where a remake would be much improved is higher resolution, including widescreen, analog controls, and solid graphics... none of the squirming of the PS1's raster technology. Though admittedly, some of the artwork was a bit crude. The skeletons seem a step backward even from the earlier KF games.
I will personally get around to pulling all of the original artwork off the disc if necessary. Please don't model anything in the game from scratch unless you want to use that model in another game like Rathmor anyway, and as such the result of your work can be an alternative look of the ST mainstays. So consider if you make these models from scratch, don't do them in the style of ST. Do them in an alternative style. SOM's style if nothing else. If there are already pieces in SOM that are even remotely close for what is called for, use those, even if you only want to think of them as temporary placeholders.
Don't use the AgeTec disc for text. Just don't even go there. In fact you'll thank yourself if you just put short one line descriptions of what is being communicated in each message screen. You needn't even replicate text that includes more than one screen in a row, but if you need more than one line you should. This will make it much easier to manage the script and translate later (a Japanese version with the original text is a must.)
It will be a bigger task than you think. Plan ahead. Don't get bogged down in details. The only thing that really matters at this stage is the accuracy of placement. That is the map tiles (which hopefully line up with ST's tile 2x2m grid wise) and the monsters/items/etc. You want everything spot on. That's the most important thing, nothing else really matters.
I don't see any real challenges in pulling this off extensions wise. Probably the hairiest thing is ring-based magic. But I think the sensible and best way to do that is to tie every ring pickup to a new magic learned (hopefully there are only 30, if not we can figure something out) and then the ring can just be displayed on the two magic lists along side the magic. In order to use two rings like in the original, there will be a Quick Select system in place before you are done, that will let players who bother to learn the system use as many rings as they want simultaneously. The same system can stand-in for quick select item function in ST...
It doesn't make sense to arbitrarily say you can only wear 1 ring, one on each hand, anyway. Why not wear 5 rings on each hand, or more? I would just look at the 2 ring limit of the original as an arbitrary limitation that can be improved upon by a remake. Simple as that.