I've messed around with the game a bit and I just wanna ask, does co-op have multiple difficulties applied to it? also is it intended to run with a 2nd player or with the split feature?

In the Co-op category, runs are accepted only in Hard mode and has to be played with a second real player.

Just to keep you informed, the Co-op category now has the 3 modes (Easy, Medium, Hard) avaliable.