I kind of base my perspective of P/F and P/F/H off of Harvard and Columbia from talking to students when I interviewed there. Columbia students said the H is what incentivized them to work hard, while Harvard students said every class was passable and they were under almost no stress. So I'm not just speculating. UConn might be different, but again that's your individual opinion.
I think it's fair to say that schools vary dramatically in their structure. Obviously, people will study far in advance for block exams as opposed to schools that have several exams every single week. But also, while we have several people barely passing dental school, several people almost have 4.0's. So in my opinion, passing my dental school is quite easy, and if it were just P/F without changing its rigor then my incentive to work hard would diminish b/c I would have to just pass rather than try to get 95+ in every course to get an A.
I don't know why people stress about rank. It's beyond your control; you can't control how your classmates perform, only yourself. Why anyone would even check their class rank until it's pertinent for residencies is beyond me. Is it really going to motivate one to do better when you should already be doing your best?
I personally don't check my grades till the end of the semester (save for practicals/labwork). Don't see the point. Makes life more enjoyable.