Yeha, the mods make a fair bit of difference that's fer sure. Its a bit of a shame in a way, becuase if you are keen on unlocking characters, it means you level up one guy over all the rest. I used Knuckles most of the time and had him maxed out pretty quickly. Barely touched some of the others, like Ralph or Tails until afterwards...
I think the next handiest character was Sonic.
Knux - Handling, Sonic - Speed.
I will say this though, I'd love to ask the programmers about the AI on the hard/expert difficulties. they manage to exceed their stats, greatly. Ulala is a slow character and yet on a straight, with Sonic, she can blast by without any boosts quite easily. What the hell, same with Beat and AiAi.
God I HATE AiAi...
