It's been said already, but I'll just say it best I can.
Far as I can figure, you don't have to do all the races in hard mode, but as Silent Drifter said, that it's the best way and it's the fastest. It's also good to keep your skills sharp to an extent, espcially if you're using a car that isn't too far better than the competion or even underpowered compiared to them (actually it can also apply to simulation, go for a rally course like Tahiti Maze with a 245bhp Trueno against a evo VII, a lot of 'fun'...).
Shortly stated, just keep at hard, it's a better path in the long run and obviousy you unlock more courses for Arcade mode to get better, drifting or not.
Guess that's it, till later.