Every training schedule should be tailored to the environment, situation, individual and his/her racing schedules. Cross country season is a big thing in NZ and that's pretty much how this whole Lydiard program was developed (as far as I'm concerned). To Arthur, track competition is it; but they have the tradition of track people running cross country races as well as some road relays during the winter--it was natural for something like "marathon conditioning" or "hill training" to come out.
If you want to run two marathons a year; one in the spring and one in the winter, you'll need to figure out how long it takes for you to prepare for a marathon; what you need (speed, strength, endurance, etc.) and how long it takes for each to be developed. Bear in mind; it's perhaps harder to work on your endurance for the winter marathon because of the summer heat. Likewise, it would be a bit difficult to work on your speed during the winter.
As for the schedule, as I said, that one week of schedule is one representative of 52. Any type of workout should be worked along as you get used to that type of exercise, in both valume and effort. For example, if you're not used to doing 800m reps, do them shorter. If you're not used to running 6 times 400; do them 4 times... Forget any specific times; just do them fast enough but not so fast that you'll be struggling at the end of the session. After two or three weeks, you'd get used to this type of workout; you can carefully increase the volume AND intensity. So, yes, to a point, it should get tougher as you move along; until actual competitons get nearer and "rest" becomes more important than working hard.
And, yes, I personally believe cross country phase if extremely important for overall development as a runner. Arthur used to say, "cross country running is one of the most enjoyable part of your training program." It is also, as far as I'm concerned, one of the most important, yet, neglected to be mentioned, part of overall program.