High scores are an advantage on an application, low grades are a disadvantage, both compared to the alternative. They all go into a portfolio of data points that admissions evaluates.
Very few applications are perfect. Each low grade/score has a minor impact - just don’t pile up a lot of them.
AO’s won’t know that a course was “harder than standard” as I’m not sure that has any meaning. Unless there is something extraordinary that a counselor is willing to include in their recommendation (“teacher gave all 20 students C and D grades and then was fired”), don’t try to make excuses.