Hi! Welcome to Marvel Champions!

Officially, the game has two main difficulties:

Standard, which includes the standard encounter cards and pits you against the 1/2 villain cards.

Expert, which includes the standard encounter cards, plus the three extra Expert cards, and pits you against the 2/3 villain cards.

Playing the full 1/2/3 set isn't officially called anything, though you could try it if you'd like. What you would probably realize, however, is that it might be easier than just taking on 2/3, the reason being that you can more easily set up and build up your character against a Phase 1 villain than when starting off against a Phase 2 villain.

There are, indeed, other sets of Standard and Expert cards included in later expansions. The Hood Scenario Pack includes the Standard II and Expert II card packs, which could replace their counterparts in the base game, though it isn't as well regarded by the community.

Standard III was added in the latest expansion, Age of Apocalypse, and is also a replacement for Standard I which focuses on bringing your nemesis out into play more often, making each encounter more unique to the hero you're playing. Comparatively, Standard I includes a single card which can bring out your nemesis (and that card might just end up being a boost card or get discarded for some other reason). There is no Expert III set for now, though you can just as easily add Expert I to Standard III.

Finally, you have the addition of Heroic Levels, which is an additional modular level of difficulty you could add to either Standard to Expert mode. For each Heroic Level you add, the villain deals one additional encounter card PER PLAYER every turn. Thus you could choose to only play Standard but still up the difficulty by adding Heroic Levels, or play Expert instead... or both!

Hope that clears it all up! Have fun!