Yes have to play seated otherwise the flying can make you motion-sick. But u can even fly with 1 hand down doing the thrust thing and the other hand firing repulsors. There's also some auto-direction flying during certain sequences I guess to make you feel more heroic
In the combat challenge part of the demo you need to fly towards certain parts of the stricken jet to repair it then later save Pepper and instead of making you control the flying 100% there's "aim assist" to make you fly more towards the intended location.
But in the flight challenge (basically a challenge course) it's free-form.
But as a demo it's very impressive how the game tricks you into thinking u can really 360. At some points I literally wrapped the cable around the chair stem a few rounds and didn't know until the game gave a popup to alert me. So it's measuring my movements and is part of the magic the game does to keep tracking even though my back is facing the camera.