Thanks for playing!
The game used to run on a lives system but it's since switched over to an hp system because that will work better for 2 player balance. I feel like being able to trade hits to push through a level whereas otherwise you'd be restarting the level is also an interesting choice to let the player make, as you made.
In regards to difficulty it's sort of not there yet so far since there's only a couple dumb enemies in for now. Starting HP will also possibly be lower once I introduce upgrades (hopefully next DD!).