Okay, finally after hours of tinkering under the hood I'm finally able to make Shining in the Darkness work with cheats without crashing RetroArch.
I tried changing the core emulator from pico to a different one and that didn't fix it. I tried renaming *.cht files and copying templates directly and that didn't fix it. I tried a different version of the rom with all three Genesis/Megadrive cores and that didn't fix it.
I couldn't seem to figure out how to use my USB keyboard to input cheat codes manually so I painstakingly physically drew by hand a character map using my controller and a pencil.
Eventually, I managed to figure out exactly where all the necessary keystrokes I needed were located and input a couple of codes and they WORKED! I was able to save this data as its own file using RetroArch and (crossing fingers) reloaded the game from scratch and successfully reloaded the newly made cheat file and it indeed works just fine.
I then input all the rest of the codes and the older ones and created a new file to load with the game.
Whew! That was an adventure.
