I think Very Hard is the sweet spot for 'challenging, but not stupid'. I added the Darker Nights mod and instead of using HP pools to change the difficulty, I remove all ambient, non-sourced lighting from the game world. Meaning there needs to be an actual light source for most lighting effects. This has the effect of making night in the wasteland not just dark, but pitch black -- especially in the shadows.
The way this increases the difficulty is by reducing visibility ranges dramatically. Ghouls fling themselves out of the dark, with only the sounds of growls and scuttling as a warning. Deathclaws lurk in the darkness, pouncing on you when you least expect it.
Add the True Storms mod on top of it to give yourself denser, meaner weather and the wasteland is a very eerie and dangerous place.
For the first time since playing with these two mods, I honestly felt 'Ok, I need to just sleep and let this pass' because I would be unable to see more than a foot in front of my face in the dark. It was utterly deadly to go out and I had to assess whether the danger was worth it. Daylight is a relief. I expend a lot more resources than I used to getting my settlements lit up with generators and as many lights as I can afford, turning them into oases of relief in the dark.
Also, the view of Diamond City, which literally glows against the night time sky, is actually quite lovely from outside the city on a ridge. It also shows that the fusion reactor under the Glowing, Green Jewel of the Commonwealth is one of the most important things in the entire area. It banishes the darkness and drives the monsters away. It is so bright it positively calls to you from the darkness of the wasteland. Remember, aside from DC, there's no more world awash in light like we're used to in the modern world.
Go out to the wilderness or the woods far away from civilization and turn your flashlight off. See how dark it truly is. That's what I like seeing in my game. Civilization's light has fallen, and darkness has filled the void. If you rebuild, you can make respites, where the light comes back. The glow of settlements, blazing in the dark, but with vast gulfs between them illustrate just how far the world has fallen. It's lore friendly, evocative, immersive -- and makes the game hard as hell without changing anything's stats.
Some examples of the type of difficulty this presents (and the challenge that goes with it):
Glowing Sea Rad Storm, night time: http://images.akamai.steamusercontent.com/ugc/357273736832089340/F9E2E6D7DA8094E49E84ADD89AC6C5731CEC8EFC/
Coast Line, near Nordhagen, night time, clear skies: http://images.akamai.steamusercontent.com/ugc/357273736830388898/A958B4935069E8973304F7832955C7773A5E263A/
Decayed Reactor, south of County Crossing, Night, Rain: http://images.akamai.steamusercontent.com/ugc/357273736820599678/C47C36F48F6E21839410EF0878C90A528763CC72/
Wooded area, near Tenpines Bluff, night, rolling fog: http://images.akamai.steamusercontent.com/ugc/357273736820598520/40BB93F381D717A99A7EE8BC46F5258AC5431577/
Downtown Boston, viewed from Greenetech, night, fog: http://images.akamai.steamusercontent.com/ugc/357274177497396867/B15196E49DE137AC9ABA7B7C74F8613A0862E9EC/
Diamond City, viewed from south of Greygarden, night, clear: http://images.akamai.steamusercontent.com/ugc/357273262822855425/24E31E71D26517993FFAB6B3912C24ADE761BFC4/
Not even sure where this is, but vainly trying to see in the rain at night with headlamps on: http://images.akamai.steamusercontent.com/ugc/357273736820597710/A6D20A9E7CB8E6864DCEE5F962AF8CA909D0C5B2/
Boston Ruins, unfriendly fires, Night, clear: http://images.akamai.steamusercontent.com/ugc/357273736820599993/7B56C67A80E8FACEC6C72EC01445132734502158/
Islands of safety, refuge, and light:
The Castle, main gate, night, clear: http://images.akamai.steamusercontent.com/ugc/357273736822148251/3809DE6470744E399D5AA257F9EA506ED714EAD5/
Sanctuary, as seen from Vault 111's outer area, night, clear: http://images.akamai.steamusercontent.com/ugc/357274177484196273/2459C0DA4A538A98D57234AAB140A8357083D16D/
Slim's Garage, Downtown Boston, Night, clear skies: http://images.akamai.steamusercontent.com/ugc/357273736820600569/A892A3B3534D2B234E89C4283906ACE01874CC2D/
Greygarden, from south of Jalbert Salvage, night, heavy rain: http://images.akamai.steamusercontent.com/ugc/357273262822855141/80285DE5E7E5CAD0F6048BDC3E17AF8EE2822450/