I'd like to mention the tiers system we have. Enemies HP raises faster, they attack quickier, hit harder, have additional attack, your arsenal is less efective...
Just meant to point this out.

You're quite late to the party. We've been trying to get them to do this and when difficulty came out Nick said they would make it more than just harder hitting + whatever and they never did. Excellent.

I've also written a bunch about this. To sum it up, after watching countless scrubs fail at getting rarities I came to the conclusion that easy mode shouldn't be unrewarding. Lets say I legitimately am not good at video games and want to play SK. Why should I have to grind 2x as much as some guy that's been playing Zelda and has skills that transition over? At the same time, if all modes paid out the same no one would play on elite because why would you farm on that? I proposed the following-

Normal = High sparks of life, decent rarities just like other modes, decent crowns

Advanced = Less sparks of life, same rarities, higher crowns per effort given

Elite = No sparks of life, same rarities/crowns, some form of special currency that buys harder to use weapons/gear/costumes

In terms of actual difficulty, the problem I identified was that no one played on advanced-- everyone played easy or elite, so as to either maximize the rewards or minimize the difficulty. Because of this, I would propose the following-

Normal = As it is now

Advanced = As elite is now, possibly with extra enemies

Elite = As danger missions are now;
possibly add an effect of some sort to each level, like a few phantoms, grimalkats, souls aka 'bubbles'

The end result would be that elite would be too hard and inefficient for farming crowns and rarities, but would still give them at the normal rate. Advanced then becomes the crown farm for normal players that are getting set up for gear, and normal becomes a viable route for people that need it as well as the rarity farm. Elite would be unreasonable, but would give players like myself something to do... earlier today some kid wanted me to do the arcade and I was like "no that's boring"... it's a randomly generated wonderland and I'm bored with it after 5K+ hours in game. The shrine of slumber was a great addition but it's not hard and as a single new area it just isn't enough. Well this is what would be enough.

Fehzor has the difficulty issue pretty much figured out. Rarities are not the way to reward difficult levels, beating them should be.

It would be interesting to see more level hazards and enemy behaviors that are unique to elite difficulty. Things that make it legitimately harder rather than many player's default.

I would vouch that every level (except maybe treasure vaults) could have additional lurking hazards on them. Old hazards, such as the phantoms and grimalkins that Fehzor suggests, would be a great way to make even familiar levels more challenging. A few new unique hazards could also be put into play, such as:

Status storms: occasionally in a level, players will be encompassed in a "status storm" that spawns a variety of enemies, status mists, wisps/shankles, and lost souls.

Swarm Leaks:(Arcade only) levels will occasionally have a scenario room where the swarm has leaked out to. You will have to endure several waves of swarm enemies.

Forced Danger Rooms: Introduce more danger rooms, and they are automatically unlocked and must be completed in order to proceed. It's a nice reward if you're prepared, but otherwise may cause some issues. Alternatively, replace party button rooms with danger rooms without the box reward.

These sort of ideas change up the levels without outright changing enemy spawns and behaviors (though I would enjoy advanced AI on elite difficulty), and an emphasis on fighting more stuff rather than fighting tougher stuff is something that most gamers enjoy - take a look at how Killing Floor 2 did their difficulty levels. More enemies, more attacks, but anything that wasn't a miniboss or boss fight had the same health on practically every difficulty.

More enemies - yes. More enemies = more rewards. More enemies = bombs become a bit more useful.

More danger rooms - yes. I love these. Free danger rooms? Even better.

Bigger hitboxes - no. Faster attacks - no. New enemy attacks - YES.

I want lumbers to be able to SPIN their upper body with club extended. It should trigger like Trojan's electric fart (when you stand behind them for too long)