Unlike the difficulty levels many of the game play options or game variants do not affect the difficulty of the game directly.
Use these variant settings to decide what kind of a world you would like to play in, not how difficult the game will be. The most significant choice you can make is to play a "development" game or an "aggressive" game.
In the development game the computer players are very unwilling to attack. You will be free to develop your Empire as you like.
In the aggressive game wars will be frequent and diplomatic solutions very rarely tried by the computer players.
Consult your Imperialism II manual for more information on game variants.