Currently we have to choose between what I consider boring options:
Normal and below - overpowered player character
Hard - somewhat reasonably fragile player character but at cost of enemies getting unrealistically durable
Very Hard/Survival - very fragile player character, ridiculously bullet spongey enemies that take forever to kill
I think they should change survival into basically JE Sawyer mod + hardcoe mode's style of tweaks in Fallout: New Vegas. A more fragile character, but without making NPCs feel so comically tanky. More limited resources with a more limited carry weight limit. A need to eat/drink/sleep or suffer stat penalties. And, your health gains are much slower(they can keep the same speed as survival current has).
Also, make it not mutually exclusive with the other difficulty settings, so serious masochists can still add those limitations on top of their bullet sponge enemies if they really want to, for whatever reason.
There are attribute/perk tweaks I'd like to see as well, but that gets a lot more complicated. The above is really all I need to make combat enjoyable. I really hate spamming healing resources, and don't like my PC to be overly durable, but the fix to those issues are linked to an extremely tedious difficulty setting that I just can't enjoy.