You're right about both. Heightened feelings of aggression and paranoia aside, long-term exposure makes the victim hear whispers from outside and believe that these are their own thoughts. They could also be manipulated to perceive friends as monsters, or that they are in a different place altogether.

[ Of course, Dvalin never went that far. Only Durin bore the brunt of the curse, veiling his eyes in a sweet dream as his body struggled in the snowy skies above. ]

The curse on Durin now is definitely not as strong as when it was first cast, but even so its infectious effects aren't to be taken lightly.