The game balance needs to be adjusted for hard level, and will be improved when the v1.1 update is released.
That being said, one "trick" is to rotate your villagers between occupations. Farmers always seem to be healthier than the others, so I use farming to nurse failing villagers back to health, and put the healthy farmers at the research table. The only thing that seems to help the children is to have an adequate food supply. To maximize your villagers' productivity, I suggest running the game at slow speed, and have it on in the cradle as much as possible. Several people have completed the game on hard setting, so it's definitely possible!
