I honestly have not used those commands myself, so I could not weigh in on that one.

I guess the only drawback is less monster spawns per wave and reducing chances of finding items.

Again I will only talk about myself, at times I want to clear a mid to large catacomb for the Map, so when backtracking a long way to get to an unexplored opening, I would use /set easy 1 and switch to /set easy 0 about 3 tiles before unexplored opening. The purpose of this is to increase the speed to getting there and not increase experience.

Just remember to deactivate it again, it does get annoying if you forget and come across EPs.

I noticed a severe reduction of higher level drops at level 55+
is this normal?

maybe it's just coincidence / bad luck.. but i only seem to find level 0-15 drops between level 55-65++
I was hoping for at least a few level 45-55 drops through those levels; but even the evils drops garbage level 1 items..
Should i reroll at a certain level instead?

It's all luck really.
Magic Luck on gear helps but its still all RNG.