Yep, you can make the game more challenging, or easier, by messing with the characters - although making it easier is, well, easier. In vanilla each race gets a good character to start with. For Ugnari it's a spy, humans a diplomat, etc. Taking that away can make it harder but it also alters how each race plays
Even more difficulty altering can be done by assigning a trait to all characters of a type. Making all your characters have, say, 'obnoxious' and 'lazy' can create some extra difficulty.
Best way to do it is to follow the modding guide and make a theme in which you do all your customisation. Beware of dropping comma's... Other than that it is quite easy.