1) Yes, i would go as far as saying it should only be played in coop going by the demo. Lots of people say its near impossible on harder difficulties without a real partner instead of the AI
2) I played it through first time on the highest available difficulty and loved it, so yes, play it on the highest difficulty. Then once you've completed it fire it up on the newly unlocked Elite difficulty, a challenge but great fun.
3) Its good but has some balance issues regarding certain classes and weapons, certainly worth a punt.