The Witcher 3: Blood and Wine – What Happens to Items in Corvo Bianco in New Game+

Short and simple answer, no, the DLCs equipment are obtainable via crafting or shopping and are similar to same level and type items from the vanilla.

As far as I can tell, the free DLCs are all aditional content that do not affects much of the gameplay. Personally I think you should install them. Only the alternate looks are more a personal choice.

Source: played almost 100 hours on Death March (main story finished) with the DLC's installed.

The equipment DLCs are:

• Temerian Armor Set
• Nilfgaardian Armor Set
• Elite Crossbow Set
• Skellige Armor Set
• New Quest – ‘Scavenger Hunt: Wolf School Gear’

Others add new quests or contracts, again, not very different than vanilla ones:

• New Quest – ‘Contract: Missing Miners’
• New Quest – ‘Fool’s Gold’
• New Quest – ‘Contract: Skellige’s Most Wanted’

And some pure cosmetic:

• Beard and Hairstyle Set
• Alternative Look for Yennefer
• Alternative Look for Triss
• Alternative Look for Ciri
• New Finisher Animations

And last more Gwent cards (obtaineble via purchase and playing, I believe) and a new and more difficult game mode (after finishing the main story)

• Ballad Heroes’ Neutral Gwent Card Set
• NEW GAME +

There was an interview with gameplay designer Damien Monnier where this question was asked, to which he responded (emphasis mine):

[Enemies have] more HP and more damage but more focused on the damage part, it’s more about you being good than them becoming sponges for your blows, also you cannot regen HP during combat OR during meditation in hard and dark. You also earn less XP which doesn’t feel like bad, it’s just less generous let’s say.

Breaking these down one by one:

• Enemies have more HP: This may be true, but it was never severely noticeable, unlike games like Skyrim. It may take an extra hit or two to take down a common monster or enemy, and some extra time on bosses. However, as quoted from the interview, it doesn't turn enemies into damage sponges.
• Enemies do more damage: This seems to be the biggest adjustment needed when switching from a lower to higher difficulty. Where a pack of wolves can be an annoyance on Normal, they can be deadly on Death March, especially at lower levels. You might have to change your tactics/skill selections a bit to be more conscious about avoiding/mitigating damage. Bombs, oils, and decoction use also become more routine to dispatch enemies in optimal ways.
• HP Regen: In lower difficulties, Geralt can meditate when not in battle (or swimming/on a horse) to restore health. Hard and Death March remove this, making you rely on food, drink, and certain potions/decoctions and sign upgrades for your health recovery. I'm not sure about the quote about regenerating health in combat... you can definitely still use potions and decoctions during battle. The upgrade to one of your signs also can heal you, which requires you to be in combat to use.
• Less XP: I also never noticed this one. If there is a change in XP gain between difficulties, it's so small that there are several debates and videos arguing either way whether this is true or not.

With all that said, I should note that change to a higher difficulty is most extreme at low levels. If this is your first Witcher game, or your first experience with Witcher 3, it might prove pretty difficult out of the gate until you get used to enemy attacks and patterns, as well as dodge/roll/parry mechanics.

On the flip side of this, after leaving the first area of game... if you are the type that likes to finish exploration and side quests of an area before moving on or continuing the story quests, it can be somewhat easy to over-level. Many side quests are long, engaging, and make you want to come back for more. However, if you wanted to guarantee a consistent level of difficulty throughout, just be aware of the suggested levels for story quests and side quests you pick up as you progress through the game.