Quote: "So in short, how can I instance lots of different sprites which i can then check bullet collision with and remove when hit."
Translation: How do I write my game?...
There's no way to tell you 'in short' how to do what you ask because essentially, that
is your game.
All games - even simple ones like yours - consist of lots of smaller sub-topics. In the sentence I quoted above, you are talking about game logic, sprites and collision - each one time consuming to learn.
You are asking us to tell you something most of us have spent months and years learning to do.
You are trying to lump all of them together in your program without learning how they all work first. If you had learnt the 'building blocks' of programming already, you wouldn't be asking the question you asked.
So, what you need to do is split your game up into different parts which require different programming skills, then put your game to one side for a little while.
Take sprites for example:
You need to write some very basic sprite programs and build up to examples which use arrays for their screen positions. (If you don't understand arrays, then check out my tutorials).
Then do the same with collision and so on until you have an understanding of what everything does. Then you can think about joining it all together to write a game.
Seriously, no-one is going to be able to answer your question without writing a novel, or writing your program for you.
Good luck..
TDK