I am not going to play Cuphead. Not a dig against the game, I'm just not a twitch-style, run-and-gun gamer. But I really do appreciate how much love and work went into the game. When I first saw it I fell in love, and five years ago I would have purchased it and played 5 minutes of it. Now I'm too much of a realist to think I would enjoy playing the game; I'll get more satisfaction out of watching a Let's Play, most likely.
So why would Cuphead, with its cartoony, friendly veneer, bet so big on high difficulty? Even it's "Easy Mode" only shortens the boss battles a bit, and playing in that mode doesn't help you progress. As I describe in my latest Board to Bits video, I think it has more to do with the production pipeline of the game than just a nostalgia for brutal bullet hell-style play.
Making a game with hand-animated characters takes a lot of time, and with a small team, that limits how much unique content you can put into your game. Ramping up the difficulty extends the time players will spend with the content you have, and it's a good fit in the run-and-gun space. Also, more time spent playing the game means more time to appreciate all the work that went into the game, so it's a win-win really.
DISCLAIMER: This is just my educated guess based on what I've heard about the game and its production. Whether it's true or not, however, I think it's worth looking into as a indie studio, when weighing out what you want to focus on in your game, and how much time and resources will allow.