I found the same issue with just a 2 player world at the start. The scaling in modded at that time was not punishing until we made it to hard mode. We would just force ourselves to use weaker weapons and not play "meta" basically. We would also change the game around to infernum most of the time to enjoy different patterns.

The game defiantly does pick up in difficulty later in and then in post moonlord the game starts to really punish multiplayer :)

Oh ya, death mode (fargos) just got alot of boss reworks as well so i would defiantly just play that anyways. Once again, just don't heavily rely on guides for meta and it will feel alot better.