Ace Combat 8 Difficulty Levels
There are 4 settings: Rookie, Pilot, Veteran and Elite. Pilot is the default, and you can change the setting at any time from the options, including partway through the campaign. Difficulty is separate from the control mode, which decides how the stick turns the plane.

Rookie
For the story
The gentlest setting. It adds an option to reduce damage from hitting the ground or buildings.
Pilot
The default
Recommended for players new to the series or back after a long break.
Veteran
For series regulars
Enemies can take more hits and fight harder, depending on the mission. Missile locks are harder to shake, and how fast you recover from damage depends on your loadout.
Elite
The top of the four
Built around reading the whole battlefield and choosing target priority well.
Which setting to pick
New to Ace Combat: stay on Pilot and change the control mode instead if the plane feels wrong; that is the more common stumbling block. Coming from Ace Combat 7 on Hard: start on Veteran. You can switch at any time, so dropping a level for one mission that has you stuck is an option; just note that some achievements are tied to finishing on a given difficulty.
Is there a harder setting than Elite?
Yes. Beyond the four settings above there is an Ace difficulty, with achievements for clearing the campaign on it and for an S rank on every mission there. How it unlocks has not been confirmed; the missions page will add it once it is.
Does difficulty change your rewards?
Players disagree. Some report that replaying a mission pays the same MRP whatever the setting; others say the results screen applies a difficulty bonus. If you are farming MRP for the Aircraft Tree, time a replay on two settings and compare the payout yourself.
Control mode: Standard or Expert
Standard turns the plane when you push the left stick left or right. Expert rolls with the stick and turns by pulling back, which gives you the full range of manoeuvres. The controls page covers both, and flight sticks.