How do I make a number have corresponding text?

You can use a dictionary to define what each number means.

It would look like this:

Local names = {
["1"] = "Easy",
["2"] = "Normal",
["3"] = "Hard",
}

You can easily get the value of your key like this:

TextName3.Text = names[Difficulty.Value]

You can use an array/table too if you are only using numbers to call a value.

The main problem with your script is on line 2, as "Easy" isn't a defined variable yet. You can also use an array to convert numbers into strings quickly without making 3 extra lines of code.

You can also use a function to actively change the gui's text.

Here's your edited code:

local Difficulty = workspace["Lost_Forest"].Settings.Difficulty
local TextName3 = game.StarterGui.ScreenGui.TextName3
local DifficultiesArray = {"Easy", "Medium", "Hard", "Insane", "Crazy"}

--Heres a tip!: You can replace "game.Workspace" with just "workspace".

Difficulty.Changed:Connect(function()
    TextName3.Text = DifficultiesArray[Difficulty.Value]
end)