Hi, glad you enjoyed :3
You can change the difficulty at the start of Alchemy Quest to play a harder version. But this can only be done on a new save. Also you're probably better at RPGs than the average person as a lot of people found the base game quite tricky :p
Not sure what to say about drop rates for items as it depends on a lot of factors. But a lot of high-level items only drop after beating most of the game.
The stores are more to offset bad luck if the dungeons doesn't drop anything at all for a specific slot, rather than competing with dungeon loot.