I picked up everything cuz I'm a keener. The points are in the diamonds, and I'm pretty sure only taking damage resets their value, or getting enough for a free life. I don't get hit much and I pick up all the diamonds, so whether taking damage or not impacts the points I'm not sure.
But that's the best advice I can give. There's three tiers to this game, really.
1) be generally good at dodging things
2) pick up the diamonds, and don't get hit
3) learn where the hidden power up's are, especially flight and Macho Riki
You can get by with 1. You can get a big score with 1 and 2. Do all 3 and you're laughin.