The difficulty level gives a HP modifier (+60/+15/-25% for easy/normal/hard) and the hard difficulty modifies chance to hit (you get -10%, opponents +20%). Don't know if that is all it does, but it shouldn't effect the number of opponents.
The Skeletal Scorcher starts off alone, and there should be another 4 show up after a turn. Did you stun lock him, or kill him the first turn, or something?