STEP: Hardcore: Add as many mods that spawn more and harder creatures as possible. Throw everthing, but the kitchen sink at you. Include SkyRE, ASIS, SkyTest, More Bandits, high level enemies, as many mods that have invasions as possible. Throw in all the survival mods as well.
Then to balance it. Add mods to allow more followers.
I think we actually need to create a mod to make this work. It is too hard to tell who is on your side and who is the enemy when you fight in crowds. So you end up kiling guys on your side. If you attack a guard he attacks you. So you need something that has a targeting system and makes it easier to see who is on your side and who is not.