This time I'm voting right away as on this issue I have a pretty clear stance: higher difficulty means basically more monsters, just like it did in Heretic and Hexen. This is one of the greatest strength of the games and the engine, you can literally have a crowd of dozens of monsters attacking you at once, the only code update we need is a smarter AI that makes monsters not get into each other's line of fire mindlessly (it's OK if they sometimes do, just not always).
This also allows for a quicker and more consistent level design which is also more story bound (i.e. there are always the same kind of monsters in a place, regardless of the difficulty).
Also, the supped up version of the monsters should appear during the progression of the game, not as part of a different difficulty. This way, the game is always the same, just the number of monsters is different.
Since we are going with the character migration stuff, I think we should keep the 5 different difficulty settings and really distantiate them, i.e. difficulties 2, 3 and 4 should be easy, normal and hard, diff 1 should be super easy and diff 5 should be ultra brutal hard. In each part of the trilogy, the difficulty would go up one notch, i.e. the 3rd part of the trilogy on super easy (diff 1) would be as difficult as the 1st part was on medium (diff 3). This is to balance out the increase in lvl and the better gear of the player.