Regarding admissions, do Medical Schools consider the ranking/difficulty of your undergrad institution when considering your GPA?

Yes, of course. Your chances of getting in are much better if you come from a highly ranked school where there's tougher competition to get grades. 

To some extent, but not really.  You can get into medical school after receiving an undergraduate degree from just about anywhere.  Grades and test scores are the primary consideration, and they don't often consider differences in difficulty between degree programs.  It's generally better to have a higher GPA as a psychology major than a lower GPA as an engineering major, despite the fact that engineering is considerably more difficult.  There are certainly exceptions to all of this, and some highly selective med schools may place more emphasis on institution rankings.  But in general, the prestige of your undergraduate institution matters relatively little in admissions considerations for medical school. 

Admissions committees are thoroughly familiar with rankings, requirements, etc, for all premed programs. They may even set a cut-off, say, top X# of premed programs, in addition to setting minimum GPA, MCAT scores, etc. to be considered.