I am only halfway through the game but unless the player is heavy grinding, I think the game will be very challenging on the hardest difficulty with that methodology. I don't really grind in most RPGs unless I absolutely have to, so I don't know its impacts in this game.
I feel that, but from my experience with most Tactics game, outside of something like Maddening in SOME Fire Emblem games, if you push the game to its limits with theory-crafting, its going to be an easy time in any Tactics game. Idk, it it gets easier in UO later, but where I am at I can say, yeah, its easier than FE Maddening but also just as challenging as Engage/Conquest on Hard with really good squads. But that's just my opinion, everyone has diff opinions on difficulty.
I HATE time limits. I stopped playing Wargroove very early because of rewards tied to how quickly you play. In UO, I would say that its largely a non-issue. IMO, you can beat most maps before the time hits the 30% mark. If its taking longer than that, you are either extreme turtling, taking inefficient approaches on the map, and/or have inefficient unit setups. I only ran out of time early game when I was still learning. Even when you do run out of time, there is a item that you can get a decent amount of (albeit finite) that can reset your clock if you run out. Admittedly, the existence of that item can make the game easier imo as it is REALLY hard to run out of time if you are actually playing well.
OT: I would actually love if Fire Emblem or other Tactics games used an Overworld system like UO. Its something that I found very refreshing and am really enjoying, espeically after dealing with FE Engage's somewhat lackluster hub.