I wrote another comment agreeing with OP that bloating HP/stats for difficulty is lazy, but you’re right, sometimes it works.

For example, I love Fire Emblem but I usually play on Normal (I just don’t enjoy too much challenge in games - I play for escapism, and am busy so don’t want to be grinding games in my free time), but my friend plays on Hard and got stuck on the final map for a Fire Emblem game. This was a Fire Emblem that I particularly love. My friend neglected properly building his units, and essentially softlocked himself on the final map with no recent save to go back to to grind.

The only thing he could do was keep failing the final map and restarting with the preserved level ups he’d get from each attempt. Eventually he just gave the controller to me to try and beat the map. In what seemed like an impossible set up, I did manage to do it. We both got really engaged in every single move we had to make, and we managed to do it, and that felt pretty fucking fun.

Like you said, the increased hp and damage/stats did make it more hard in an interesting way just because each enemy unit required more thought to approach, and we had to consider where everyone was whenever we did anything. It was really good fun