Auto healing after battle/save points - I have never found a game to use these features and not be a bit poorer for doing so. They don't actually increase challenge, they usually do the opposite for me. It doesn't help that these games tend to use combat systems that come down to simply finding the right tactic than an actual challenge where you have to throw everything you have at it. None of this has been helped that years of item management style gameplay has taught me to show restraint so even when given the option to nuke the enemy with the big guns consequence free, I'm more likely to choose efficiency over grand standing.
It isn't intended to make it more difficult. It's intended to change what is difficult about it. And I really fail to see a distinction between "finding the right tactic" and "an actual challenge" if the right tactic is challenging.

And it sure sounds like you've played a lot of games with bad open worlds and bad "moral choice" systems, and none of the good ones.