well, the thing about the difficulty slider is that unmodded, this doesn't affect the AI of the monsters (i don't think so, at any rate) but insteads, just ups the amount of damage you take.
so, if you are taking damage and it's negligible, try adjusting the slider to see if that makes it more fun.
alternatively and more likely, is that you aren't being hit at all and the desire is for more dynamic enemy behavioral scripts. you want your enemies to be smarter, in other words. If this is the case, try installing select parts of the Tactics mod.
www.weidu.org has a list of many of the commonly referenced mods.