It's not a change in difficulty the normal way you'd usually think of it for most games, such as enemies having more health, player having less health, etc. The only things that are more difficult on the "hard" track (which I prefer to call the good ending track) are:
-You don't get the Booster for the end of the Labyrinth (Monster Nest -> Core -> Waterway ->Ironhead)
-You do the harder Final Cave
-If you want the ending, you have to beat the hardest level
-You have to fight two extra bosses, and two more at the end of Hell
That's it, really.
You can change the difficulty in making a mod in a similar way that it was done in Endless Chaos, by having spikes that are flagged to appear only in hard mode, making life capsules give you less health, starting you on less health, etc. I don't think it's possible to give the same NPC different health levels, but you can have more enemies in hard mode, by way of flags, same as the spikes.