Bad guys spawn in three ways:
First from warp points like normal.
Second from reinforcements like normal.
Third, they spawn constantly from the top(ish) of the screen.
You can shut down the warp points, but it is VERY difficult to do on higher diff levels because you start with so little cash and are under attack quickly. It is hard to find and kill 3 warp nodes while defending also, and trying to keep some nodes for cashflow.
---
Threat level means higher difficulty basically. Enemies dont get more health but they tend to get better reinforcements, more warp node reinforcements, and they have more production.