If you hit escape once in game you can bump it to Hard mode. Its not any more difficult though but gives more gold.
Legendaries drop from anywhere. They seem to match the level you are, so they will always be 13 if you are capped. By in large they are for the class you are playing but not always. We like to start at the last act, fund the Skelton king. There's like 4 levels of dungeons, just clear the whole thing. After it's over just leave game and restart the quests there. The fields after the hedrig wife kill are decent too. Ive seen lengendaries from Skelton King (2), most come from trash just by the odds of it.
There is no restrictions on loot on how many times you killed nor is there any way to increase drop chance? Bumping to hard just gives more gold and that's as High as you can make it. The Nagel ring gives +magic find which I think it just blues and yellows? Not sure about that.
Are you all playing EU? Are you located in EU? I think when I play it's like 4am there..
Let's all add characters and time of day when you play to this. Bump for activity and I'll try and get on.