I try to stick as closely as possible to the OSRIC rules. More or less, though, high strength will make it slightly easier to hit creatures with hand held weapons, and will do more damage with hand held weapons. High dexterity will make it easier to hit creature with missile weapons, and make it harder for you to be hit by creatures. High constitution will give you more hit points. I'm not sure there is currently any game effect from intelligence, wisdom or charisma.
Encounters are scaled based on a calculated challenge rating for your group. This is your average party level if you have six characters. If you have less, it's scaled downward. So it does adjust to your current party membership. This is then adjusted based on how far you are from the road. The further off a road you are, the more dangerous things you may encounter.
That being said, the heuristics I have for assessing how hard a monster encounter is are not foolproof. They try to calculate a monster's rate of inflicting damage against an "average" party. So parties with special equipment will fare better. And monsters with special attacks will do better. And, of course, there is plenty of randomness in there to mix things up.
Generally when I'm low on hit points I tend to stick close to the road. When I'm bored or looking for a fight, I head off into the wilderness. You can pick your pain level.
Setting your party's combat order is a good thing. Defensive characters at the front, and missile users at the back. Monsters that come in large numbers, though, will envelop your party and will be able to attack your real line troops. I also have a bug outstanding to look at where monsters seem to be able to attack second line fighters when they shouldn't. I've seen it happen once or twice, but I was working on something else and couldn't look at it closely at the time.