In Hard, you recover morale at all the times you normally would have except when you level up. Vanessa's face shows up when Kiss of Death's card skill animation is going, just before it brings you back to active gameplay (then it changes back). You can also go to a new battlefield on Hard if you fight on BF48 (obviously with new scenes, new enemies, new card skills). It's basically a slightly delayed version of the same ending, but it's pretty neat and you'll need to go there to complete everything in the extra contents.
I'm not sure about the specifics with Pamela joining you, but when I played it ages ago I got her to join me on Hard just by having Nietzsche talk to her. I'm pretty sure I still beat her up. I'd double check this on GameFAQs to be sure, though.
Using Refreshment is a really good idea on Hard mode. Then you can make up for the fact that you don't regain morale when you level up, and it's good to get rid of status effects anyway. If you had a hard time with the game on your first playthrough, you might also want to use a guide to make sure you don't miss too many of the hidden items. Then you have a lot more to use for morale recovery, and I'd also recommend equipping good items for their stats and effects when you know you're about to start a tough fight. It really helps a lot.
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