Out of all of the touhou anime out there, Hifuu Katsudou Kiroku: The Sealed Esoteric History pretty good, but I'd still consider Phantasm to be better animation quality wise. The problem I have with this show is how uninteresting the plot is. There is no action scenes really, and 99% of the show is dialogue. Plus, you aren't even in Gensokyo in this story, and instead are in modern day (futuristic) Japan as a setting for a lot of it. Not only is the modern day setting extremely mundane, but the characters in it don't make it any better for how lackluster they seem to be,and the dialogue that they sputter out is mind numbingly boring. I swear, the adapted materials for this show is extremely bad, and the pacing is extremely slow. I made a point that Phantasm had quite fast paced episodes, and this story suffers the exact opposite.
Especially in the first episode, if you take out the modern day fluff, you basically get five minutes of real action and dialogue. Seriously, and they expanded that to 24 minutes of random exposition and content being dragged out. There's probably less than 30 seconds of any fighting, and for the most part, the fighting choreography is mediocre. Even if you are a huge touhou fan (I am not), I really doubt that this would capture your attention for an entire hour's worth of pointless dialogue of loose adaptations of arcs that managed to be dragged out to all hell.
Characters look pretty good, but the lip-syncing is bad and there's a lot of still frames of people just talking. Background is nothing to write home about, but that's not the reason why this show fails.