All of this sounds very Diablo like. Now I don't want to play it... sounds like too much fun and a lot of hours of my free time just flying away.I played on Normal honestly, and lots of parts got challenging. I was happy with that difficulty level.
The game has a very large endgame for optional grinding and difficulty increases (mostly replaying stuff at much higher levels). After beating the game, all my jobs were capped at 30. Now I'm playing on Chaos difficulty and trying to grind all the jobs up much higher level and get ideal gear. To play the DLC you can only play on a new Bahamut difficulty, which is Hard+3 basically. (Hard, Chaos, Bahamut).
I'd suggest Normal until beating the game, but you can switch it back and forth anytime. You get increased rewards on higher difficulty, and the endgame stuff you can freely jump between difficulty levels on the fly to try and go for higher rewards.
Nah just kidding, sounds awesome. Already downloading it in hopes that the latest patch has made things better. If it runs fine I'll be diving into it once I finish with Yakuza 5.
Btw! Once thing I really liked back when I first tried it was the music, specially on the bosses.