Hiruzen probably knows about Kakashi's use of clones, he used to be part of Anbu so he must have intel on him, he will surely be prepared. His acute nose can be useful to smell the real one behind the trees, he doesn't need to see him:
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He can attack the clone mid-distance with this:
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.
As for the Water Release:Great Waterfall jutsu, Doton > Suiton, if this:
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could stop the 2nd's jutsu, i'm sure it can handle Kakashi's copy. Also when Hiruzen used the wall, the attack had already been launched so he can put it up quickly too, he has a 5 in hand seals.
I doubt Hiruzen will fall for genjutsu, he has a 5 and the only kage level shinobi being caught up in one are Oro (while being reckless) against Itachi (Sharingan + 5 in genjutsu) and A (while being caught by Susanoo's hand) against Madara (no need for explanation). Kakashi won't go underground if Hiruzen is constatly on his tail.
Oro and Kakashi share the same databook stats for speed and Hiruzen managed not only to keep up but overpowering him. Kakashi has a 4.5 in taijutsu while Hiruzen has 5 this makes him slightly superior in CQC, plus Enma can make surprise attacks by emerging from the staff.
Hiruzen as a 5 in intelligence, plus has years and years of experience he won't be fooled easily.
Everyone can use smoke bomb attached to kunais, that is standard ninja weaponry.
Finally, Hiruzen won't be fighting alone, Enma can cover for him, protect him from harm with Adamantine Prison wall or use the same fr capture.
Either way Kakashi won't escape from a draw due to Reaper Death Seal, Hiruzen can perfectly remove one soul completetly and has what it takes to catch him.