At least one hidden dungeon in every area has endgame stuff. There's multiple hidden dungeons in each area though, some of them are doable earlier.
That one in particular, only Northern Space is endgame, the Southern Space is relatively easy. If you keep up with quests then they'll send you to the areas when you should be appropriately strong enough.
You can always run in, avoid the enemies, loot the chests, and use scouts to get all the materials too, can make some endgame items really early.
And yes HDD form increases stats, you can see the boost in the status menu, press the button to toggle form.
For some reason Northern Space has a lot easier enemies on the 2nd floor. --- PSN: TheRedMage ,only EU players need apply All praise the poor Shrine Maiden, the Ordinary Magician and the holy being ZUN. Convert to Touhouism today.
If you enter Northern Space you will keep finding the hard enemies, if you dodge them and make it to part 2, which is called Southern Space, you will have a much easier time with the monsters, there is also a Save Point which will help you with grinding and not dieing as much. The boss's for both Northern Space and Southern Space are the same, you might wanna avoid them for now.
If you think that's hard, I just got a new dungeon in Eden and my party almost got wiped by some random first mob and my party has good equip and is in its 80's. --- http://www.blogcdn.com/www.joystiq.com/media/2008/03/sexy-batarian.jpg