I have been playing Fo3 with FWE for so long the game wouldn't feel right without hardcoe, as for the difficulty, probably normal, I hate bullet sponges...
I don't mind bullet sponges in the cases of robots, super mutants, or even big daddies (for a Bioshock one) in games. That is, sizable enemies that should be notable for their endurance. When it comes to human characters though, and fighting them, it doesn't feel right at all if it's not on normal when it comes to damage allocation. So, I'll likely be playing the same (hardcoe on Normal).