It makes sense Hammerhead is resistant to being forced into a state of arousal by Flex's powers. It took Jane by surprise last time due to it being subtle and gradual. Here Hammerhead is getting hit full blast, so she is suppressing any reactions as much as possible, which is why she is vocally groaning in frustration; focusing more on stopping Shadowy Mister Evans from destroying every child in order to turn the world in an X Rated reality.
The reason Danny can get better via happiness is that they are nourished by the feeling. Therefore they get more power the more happiness others give them.