Book excerpt: Understanding galaxy evolution depends on connecting large-scale structures determined by the [Lambda]CDM model with, at minimum, the small-scale physics of gas, star formation, and stellar feedback. Formation of galaxies within dark matter halos is sensitive to the physical phenomena occurring within and around the halo. This is especially true for dwarf galaxies, which have smaller potential wells and are more susceptible to the effects of tidal stripping and gas ionization and removal than larger galaxies. At dwarf galaxies scales comparisons of dark matter-only simulations with observations has unveiled various differences such as the core-cusp, the missing satellites, and the too big to fail problems. We have run suites of collisionless and hydrodynamical simulations of dwarf galaxies evolution in massive host environments to address these issues. We performed controlled, numerical simulations, which mimic the effects of baryons, in order to examine the assumptions implicitly made by dark matter-only simulations. The too big to fail problem is due to the overabundance of relatively massive, dense satellite galaxies found in simulations of Milky Way-like environments. We found that the removal of a small baryonic component from the central region of forming dwarf spheroidal galaxies and the inclusion of a disk component in the host galaxy can substantially reduce the central dark matter density of satellites, bringing simulations and observations of satellites into agreement. Additionally, we studied hydrodynamical simulations of massive host galaxies and their surrounding dwarf galaxy populations. The VELA simulation suite of cosmological zoom-in simulations is run with the ART code, stochastic star formation, and stellar feedback (supernovae feedback, stellar winds, radiation pressure, and photoionization pressure). The suite includes host galaxies with M[subscript vir](z = 0 ) = 1011 - 1012 M[sol] and their satellite dwarf galaxies and local isolated dwarf galaxies around each primary galaxy. We found that the inclusion of these relevant physical processes aligned the velocity functions and star formation histories of the dwarf galaxy populations closer to observations of the Local Group dwarf galaxies. By reproducing observations of dwarf galaxies we show how the inclusion of baryons in simulations relieves many of the discovered tensions between dark matter-only simulations and observations.