There's always going to be a huge issue with balancing side content vs. main content. People who complete side content should gain some sort of advantage, but it shouldn't trivialize the main story as it so often does.
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A level-less RPG is an interesting concept, but hard to pull off without turning it into an action RPG that emphasizes reflexes and fine motor skills as opposed to tactics and strategy.
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I guess I find a complete loathing of level scaling in all forms to be kind of funny.
I don't really hate level scaling, or level systems. I just find them more often than not badly designed, and slightly annoying.
There's many reasons to build a level system, and even a botched one fulfill reasonably some of these reasons while not being too much annoying. Overall, it's a financial plus, and I don't want developers to cater to my wishes only.
This being said, I agree that people who do side content should gain some advantage, but getting "buffed" (more level, more stats) is the laziest way, slightly harmful with that.
I have played World of Warcraft for instance, and I have often heared that Ulduar was a fine raid. It was content were difficulty was adjustable through special interaction with the game (no menu): you had to place yourself in a difficult situation on purpose. I like the idea that side content is simply difficult (and optional) content.
I don't play anymore but I've heard about aesthetic rewards. Instead of having more character statistics, the reward would be vanity items, or more control over the look of your character (which doesn't throw off the balance).
Control is, I believe, something not that hard to implement and a very valid "reward" for mastering and exploring a game.
"If you do more in the game, you can control more the look of certain places, and the look of your characters".
And it isn't limited to aesthetics.
Disgressing a little bit to get back at control: I quite disagree with your point on level-less RPGs that would easily emphasize too much in-combat mastery as opposed to pre-combat preparation, but I think I understand what you mean. It's just that it is actually unrelated to levels itself.
RPGs do have a and strategic "planning" component, and managing the stats (and growth) of your characters play into that. But that wouldn't disappear even if you got rid of levels: levels are just numbers that condense and symbolize the number of stats and abilities you have at some point in the story .
Those stats and abilities would still exist in a level-less RPG.
Considering this topic, I believe that what matters isn't the stat growth (since ennemies in RPGs tends to grow at the same relative rate as you?), but where and how they are attributed, how you balance your character.
And a reward could be more control over them (not more stats nor more abilities, but more control over how you can disperse them, or more ease to switch them).
Players like to control how they look, players like to have more control on their character stats (be less "all-rounded" and more "specialist" if the possibility of being an extreme specialist is being held off at the beginning), players like to respecialize characters (I think the demon in Divinity Original Sin allows for respec at some point?).
Having to grind a new character that you recruit is boring (which is why companions autolevel?), being blocked by a basic wolf that is currently just level 3+ compared to you (so you have ridiculous penalties to hit) isn't really exciting when you know you just butchered thousands of them with a different color sprite and 6 levels less. Wading through low level monsters in a low level zone is boring if the stat growth is surreal. Etc, etc...
Ultimately, I think a level system and even level scaling are good things (when done right). It's just that it is so often badly thought out (and often associated with bad behavior like using it as a reward for doing unfun things, badly designed game parts). It's just not something that is exciting most of the time, and it's not part of the good memories of the games I've played.
