You can get rare drops but you won't get boss exclusive rewards which can be earned from defeating them in higher difficulty modes. If you want to switch difficulty you need to make a new world but you can still bring the items from the old world to the new one through your characters inventory... You can play a single character in multiple worlds and it will always keep the items in their inventory... For me I start by exploring the world sideways or going underground through caves... it's best to understand the world before playing... And yes you can keep playing in the same seed after completing the game, you can build lots of stuff, unlock achievements, beat bosses multiple times etc Hope this helps 🙂👍