If I play on master difficulty and install a mod like deadly dragons with hardcoe setting, does the difficulty then multiply the mod setting for damage and creature HP?

Since a mod is altering the base values for damage or health or whatever, these changes will be used by the difficulty setting. So yes playing wtih difficulty enhancing mods on Master is much harder than Master by itself. That's kinda the point, isn't it?

Yes. High level dragon fights take a LOOOOONG time. My DD was set to hard, not hardcoe, and it would take me at least 20-25 min to beat a Bone Dragon or Aspect of Alduin.