There's a lot of lore, but as with a lot of rpgs you don't have to read it all. It can be nice to browse it as you have time though.
I did ME1 on Veteran and regret not doing it on Hardcore. Have put ME2 on hardcore and it feels a lot better so far.
On ME1 I stuck with the same team the whole time (I'm a soldier, had a biotic and an engineer) and had no issues, and felt powerful. In ME2 it's already feeling like I'm really going to want to spec my team out for the mission ahead as much as possible, so will be constantly chopping and changing team mates, I like that. I'm going to try and avoid reading ahead as to what exactly the mission contains, but I will be reading the mission specs etc to try and get a decent idea.