1 - He's still in the campaign in a few places, but the main hero is his son Kastor. Amanra and Ajax are still there and help out Kastor. (Also remember, Arkantos was made a god at the end of AoM!)
2 - How hard it is depends on what difficulty level you choose. The AI in The Titans is better than it was in AoM, so even Hard difficulty level might be hard, depending how good you are . My main concern with the campaign is that it's pretty short, so you can finish it in a few days. However, single player random maps, and multiplayer, are better in The Titans.