After looking through the link provided by MrLemon, and given the history of console Mincraft inheriting from PC Minecraft, I believe the following to be true.
To answer the questions above:
- Remaining in the area is defined as having the chunk loaded.
This is a cumulative measure of time—if 50 players spend a single hour in a chunk, it counts the same as if one player spent 50 hours there. The effect of inhabited time on regional difficulty is capped at 50 hours.
- Going beyond the bounds of the chunk no matter how far or how long, does not reset the time. Although total time spent in the game is another factor that lessens the effect of cumulative time spent in a chunk.
Total play time in the world also contributes to regional difficulty. This effect doesn't begin until after the first hour of play time, and is capped at 21 hours.
- Harder monsters is defined as:
- a higher probability of any of the following:
- Mobs are more likely to spawn with armor.
- Mobs which spawn with weapons are more likely to have enchantments.
- Mobs which spawn with armor are more likely to have enchantments.
- Mobs spawning with enchanted equipment will have higher levels of enchantments.
- Skeletons and zombies are more likely to have the ability to pick up dropped items.
- Zombies are more likely to have the ability to break doors.
- Zombies are more likely to have a greater follow distance.
- Zombies are more likely to be “Leader zombies" (gaining a bonus to max HP, a bonus to the chance to spawn reinforcements, and the ability to break doors).
- Slimes are more likely to be big.
- Spiders are more likely to have status effects.
- This can lead to a supply of weapons/armour as they have a higher than normal chance of spawning with those items. And according to this page on the wiki:
Any naturally spawned equipment has a 8.5% (9.5% with Looting I, 10.5% with Looting II and 11.5% with Looting III) chance of dropping and will drop with a random durability.