Flatland -- What does the author mean by "only hard"?

Here, “only” has the same meaning as “but”. The inhabitants of Flatland are like shadows, but they are hard and have luminous edges.

When he says “hard”, I think he means that two Flatlanders cannot occupy the same place at the same time, and they cannot change their shape.

Perhaps it is the use of the word only that's confusing. In this case, it means "like shadows except that they are hard and have luminous edges."

In the excerpt, only means but or except, and hard means impenetrable except by force. Like cast shadows, Flatland figures are surface phenomena; unlike shadows, which merge or overlap when they encounter one another, the figures cannot overlap, and break when forced together. In short, like shadows, Flatland figures are of the surface, but unlike shadows, have substance that can be felt.

Note, Flatland is a flat plane. Its figures are straight line segments, isoceles triangles, or convex regular polygons in that plane; or are "circles", approximated by polygons with hundreds or thousands of sides. The sharp ends of lines or the acute angles of isoceles triangles are dangerous to other figures. For example, in Chapter 10 one finds:

Every Isosceles now saw and felt a foe in every other. In half an hour not one of that vast multitude was living; and the fragments of seven score thousand of the Criminal Class slain by one another's angles attested the triumph of Order.

The "hard" is in contrast to shadows, which are soft edged, and can merge. The implication is that they are not as ethereal as shadows. But as 2-dimensional.