The manual explains the difference pretty well. I don't have it with me, but it basically says that the difficulty setting affects how likely you are to hit enemies and how likely they are to hit you. I believe that would also be true of spells.easy means you are more likely to hit them, and they are less likely to hit you. Expert would make it very difficult to hit them and easy for them to hit you.
It is amazing how many answers are in the manual, but it seems very few people read it.
The manual gives little detail. I am curious about any ideas on HOW it makes it them harder to hit, suggestions on altered strategies, and other factors that may change. For instance, I have been using Guardian Angel and running when I almost never did that on Normal level.
It took me several tries to get away from the Juggernauts before I thought of lowering the difficulty. Instead of chasing me from almost to the cemetary all the way back to Arnika (expert), they gave up in a couple rounds (on novice). To me, that implies something a little more intricate than, "the difficulty setting affects how likely you are to hit enemies and how likely they are to hit you"