There's five levels of difficulty if I recall correctly:
Story mode is specifically meant for playing through if what you really want is the story and you're not keen on combat. It makes everything easy, although on the flip side you also don't get access to some gear and weapons that are only available in Normal or harder difficulties. You're still going to have a hard time if you just wade into a giant group of machines, but most of the scripted, unavoidable fights become a lot more manageable. You could probably walk to up to anything except a Thunderjaw and live past one hit.
As I mentioned, I played through about 98% of it on Normal and only hit a wall twice where I couldn't defeat the boss. The first time I backed out of the area and leveled up a bit and grabbed more kinds of weapons, and was able to beat it. If I'd had more patience at the final boss, I could have done the same thing, but at that point I just really wanted to see the ending because the story is so good. After I beat it on Story and was satisfied, I changed the difficulty back to Normal, grabbed gear I was missing, and went back and beat it again.