Server/Player Difficulty:
These are the closest plugins that I could find to what we're describing about customizable difficulty. They're from bukkit, but might give some ideas as where to go with this:
https://bukkit.org/threads/mech-customdifficulty-v4-5-0-monsters-too-strong-or-too-weak-for-you-change-it-1240.20135/
This one I especially like, because it would perfectly solve our differing difficulty preferences:
http://dev.bukkit.org/bukkit-plugins/dynamicdifficulty/
Of course, if we aren't able to do this, and we end up having to settle on a universal difficulty standard, then we'll have to compromise on something as a group.
On the idea of becoming progressively more challenging, there is in-game mechanics regarding regional difficulty basically involving how long you stay in an area, making it progressively more challenging against mobs. However, this mechanic is not active on easy mode (which is what the server is on) due to the algorithm to calculate the local difficulty level. It only kicks into effect on at least normal difficulty.
The regional/local difficulty mechanism is summarized as such:
Regional difficulty is specific to the loaded chunks around a player or grouping of players, and is weighted by both the amount of time spent and the number of players in that loaded area. The effect of increasing difficulty is capped at 50 hours for a single player, but 50 players standing in one area for 1 hour can achieve the same effect.
Regional difficulty will have an effect on generally the armor and weapons they yield, and the chances they'll be enchanted, but all the effects can be found on a table at the bottom of this section on the wiki:
http://minecraft.gamepedia.com/Difficulty#Regional_difficulty
On the same page, you will find the summary of regional difficulty, in addition to the main topic of general game difficulty, in which you can see how changing the server difficulty between easy-normal-hard will affect everyone.
I think if it's too complicated to try and implement some system beyond giving a starter kit to newbies who want it if we were to go to like hard mode, then perhaps normal difficulty could be a relatively good compensation, and we could still do starter kits if we so wish. On normal, we'd get a small boost in mob difficulty, and also allow regional difficulty to kick into effect, while respecting those who don't want to have as hard of a time starting out.
While it is true some people will still have trouble on easy difficulty or just prefer to not face as much opposition, I feel like part of the perception is that newbies have a hard time with easy difficulty mobs is in part due to the fact that some people just run into the night unprepared to fight mobs, rather than playing tactically and digging underground to gather resources to make them more well defended. Some say that the mobs might scare the newbies off, but I feel newbies that get scared off, even from easy difficulty, are partly those who don't play as tactically. Of course you will likely be killed running straight into the wilderness and not dig down at night.. that's expected. I've seen it happen plenty of times. The problem is, we'd be always constrained to making the server as easy as possible in every aspect to respect what the most inexperienced minecrafters would feel, and what some of the less tactical would do. If the mobs are too difficult for some people and we need to respect that, then likewise would apply to our dynamics of the game such as town startup and running costs, and I don't feel the goal is to make it as easy as possible to do anything/everything.
I think we should encourage the creative freebuilding as much as possible, while still advocating challenging aspects that keep the game interesting and dynamical, whether that be through mobs, economic system, etc. Since there's a good group who prefer the game be easier, and a group who prefers the game be more challenging, I think a compromise between the two would be fair. While my preference is to have it on hard, I know some want it on easy, so perhaps we could settle for normal and starter kit based on a vote if we couldn't change the difficulty per region/person.
Being a fan of ultra-hardcore, I think it would be cool to include a plate at spawn which activates a command block to toggle the natural health regeneration of that player. In turning natural health regeneration off for a player, it would mean that the player can no longer naturally heal by filling their hunger bar, and they will be forced to heal by means of golden apples or potions only. This would also serve as an additional per-player difficulty selector, and definitely would be a challenge for those who choose to accept it.
Spawn Shops:
The spawn shops and their contents should be discussed with respect to the best interest of either the challenging aspect of the server... I feel it should have only the unobtainable goods, but on another hand, if we want to encourage freebuilding, then to what degree to we encourage it? If you think about it, there's different levels of encouraging it-- we could say, hey, you can have creative mode, and everyone can have unlimited materials and freebuild many things, but there'd be no challenge or very little (obviously this is not what we intend). We could say, no creative mode, but we'll charge a generous price at spawn for everything you need. And of course, there can also be anywhere between all materials, or no materials in the shops that are obtainable. Ideally, I feel it would have been best for the beginning of this PvP server to have no building materials that were obtainable, but of course there are things like lapis and coal blocks in the shops.
I feel like if our best interest is to balance both the challenge and the freebuilding aspect, and perhaps the economic interaction between players (playershops), we ought to stick to selling unobtainable materials from the biomes we lack, and maybe the most basic of survival stuff like food. To further balance the more newbie-friendly aspect, while still allowing the server to have its challenges, players could start with a little more cash as to buy a few more pieces of food and/or minecarts if they need them.