Complete the game with all 5 of the secret characters, then save the game at the end You will be then able to select hte difficulty and music.
To get Frank
He's located in Flagard, simply physically push him into your headquaters. He's the easiest of the 5 secret characters to get.
To get Noon
At the battle outside of the Mansion (Rilix), don't kill any of the zombies. Let Kahn use his orb on all of them.
You'll get Noon after the battle inside of the Mansion, as you're leaving.
To get Pen
1) On the train, find the Chicken Feed, and use it on one of the chickens.
2) At Vagabond City, buy an egg from an old couple.
3) Use the egg on the Chicken.
4) Pen will hatch and run away.
5) Find him at Storich.
To get Ratchet
Inside the Mansion where you defeated Vandal, search through the rooms, and hit a switch in the machinery room. Ratchet will run out. Talk to him again at Vagabond City, and again he'll run. But later he finally joins your team before the Dragon Cave.
To get Hagane
During or after the battle ''Tower to Observatory'', check the fifth pillar, he'll then join your team.
To get the Ship's Key
At the battle in Figard's castle, attack Fiale, and he'll drop the key.
The key is used in Scenario 2.
At Balsamo City, go up to the inn, and upstairs. Find a hidden door, and untie Bernard. You'll be able to use him in Scenario 2.