I love Nightmare Ironman challenge. Its fun.
However once i finish it once, i dont think i will ever run it again. For a very simple reason - the fact that casters always oneshot you, the fact that it heavily promotes specific game style (ranged combat, avoiding getting hit, skipping quests in caves/near casters / etc) etc all results in every run essentially being same. Sure, your spells might get different due to draft, but the overall loop, the locations you go to, the quests you do, the build you try to make, will always be more or less same.
I love idea of doing challenge runs, and having a harder time leveling. However simply running Ironman is boring, and Nightmare is great first time but not so much on repeat runs (see above for reasons).
As such, i suggest an additional game mode, lets call it "Waking Dream".
A player at level 1 when choosing challenges could choose EITHER waking dream OR nightmare (mutually exclusive). Nightmare would remain exactly same as it is now. Waking Dream would slightly reduce the overall damage taken (lets say, 200% increased physical 200% increased spell damage taken), while providing less rewards than Nightmare.
The point of Waking Dream is not to make "easier nightmare with same rewards", but rather "challenge mode for people who want something more than just ironman, but cant be bothered with the slog that is Nightmare Ironman".
You dont need to give any special mounts etc, maybe just a couple runes or something i dont know. Honestly i just want it for the sake of having a challenge while leveling without having my run end in 1 second because i accidentally pulled a caster mob who one-shot me with a single fireblast.
tl;dr - keep nightmare as is, add an additional "easier nightmare" mode for people who want a challenge but not so punishing as nightmare. Reduce rewards compared to nightmare.