I don't think very much has been revealed yet about cosmetic character customization.

D:OS will be released on PC and Mac.

A full toolset will be included, scripting tools, dialog editor, etc. Last I heard (in an interview on Youtube IIRC) they were considering allowing importing of custom artwork / models.
From Releasing the Toolset is a Good Idea;
Originally Posted by Lar_q
The idea really is that when we release it, you'll get a full-fledged RPG maker kit where you can make stories than can be played by multiple players, with RPG development methodologies embedded that are based on the knowledge we've accumulated over the years.

Opponents do not level with you. The difficulty will be adjusted in co-op mode, though, if additional people join in (or presumably if you take on henchmen in single player mode).