You should try to find the hiding place, because there is quite a lot of money in there.
Concerning levelling:
You level up by increasing your tag skills. You need 10 points for this. You increase your tag skills by simply using them all the time, or learning them from teachers or finding certain skill increasing books.
If you fight with an axe for example everytime you hit someone/something with your axe you will get a bit better. If you´ve hit enough times you get a skill point. You can see your progress by pointing at your skill with your mouse.
Tag skills are the 10 skills marked as Major or minor skills. Not hte others listed below. If you have 10 skill points in tag skills you get the level. <img src="/ubbthreads/images/graemlins/smile.gif" alt="" />
So if you have enaugh mone3y and the right teachers available you can easily level up without even going out of a certain building (for example warriors guild).