There are 3 difficulties to choose from. What are the differences between them? Are some things only unlock-able on harder difficulties or can you unlock everything on easy?
Monsters have more health. They also appear to be more intelligent and aggressive on hero mode. They also do a boatload more damage (lizalfos hit for something in the ballpark of 7 hearts on hero mode, not sure about hard or easy).
Once you beat the game, you'll see that there are skulltulas that are only available on hard, for example.
Reward-wise, higher difficulties provide more rupees on a victory, as well as better items.
I have no observations on friendly troops yet.