Ball bouncing off paddle in a straight line

I'm working on a game of Pong and I've finally figured out how to bounce the ball off the paddle but when it hits the paddle, the ball bounces back in a straight line. Even when I hit the ball on the top or bottom tips of the paddle it goes straight back in the opposite direction. This makes for a boring game of Pong as I'm attempting to make the ball bounce back so the player will have to figure out where exactly the ball will land.

Here's my Paddle code.

extends CharacterBody2D

var speed: int = 400

func _physics_process(delta):
    var direction = Input.get_axis("p1_up", "p1_down")
    velocity.y = direction * speed * delta
    var collision = move_and_collide(velocity)

And my Ball code

extends CharacterBody2D

var speed: int = 14

func _ready():
    var target_position = Vector2(0, 350)
    var direction = global_position.direction_to(target_position)
    velocity = direction.normalized() * speed

func _physics_process(delta):
    var collision = move_and_collide(velocity)
    
    if collision != null:
        velocity = velocity.bounce(collision.get_normal())

And finally, my Main code

extends Node2D

func _ready():
    $Label.text = str(0)
    $Label2.text = str(0)

func _physics_process(delta):
    if $RayCast2D.is_colliding():
        Globals.p2_score += 1
        $Label2.text = str(Globals.p2_score)
        
    if $RayCast2D2.is_colliding():
        Globals.p1_score += 1
        $Label.text = str(Globals.p1_score)

I suspect the ball is at a right angle with the paddle CollisionShape2D which is why it's going back in a straight line, If that is the case then the position at which the ball collides i.e. top or bottom is irrelevant.

I would recommend 2 things:

1. Rotate the CollisionShape2D or giving the player the input option to rotate the paddle while in game

2. Take into account the velocity vector of the paddle and "bounce back" with respect to the ball's own velocity vector i.e. the speed of the paddle should also determine it's angle of reflection