"The players, as a group, cannot play more than 1 ally card each round."
Does this means that doesn't matter with how many players you are playing with, only 1 ally card can be played each round or that each player can only play 1 ally card each round?

Even with 4 players, you can only play 1 ally. Not 4 (one per player). Note that this does not limit "put into play" stuff like Sneak Attack, Stand and Fight or Bofur's ability.

thank you for the note as well, didn't think of that possibility

Do others think that because of this reason this quest is more difficult with 3 players than with 2? I think the best balance of difficulty for it is with 2. Solo it seems a nightmare but three rather difficult also. Except I am doing sth wrong.

I managed solo the other day using Eowyn, Frodo and Dunhere. Didn't get the greatest score (152) and it took me two attempts but I was just pleased I'd managed it at all. And I agree, this quest is definitely easiest with 2 players