Hmm I'm not sure where you read that you would always be only level above mobs? In fact I specifically mentioned a system which would allow players to grow up to 5 levels above their region's scaling so that they would not aggro the enemies. That is the faction rating system.
5 - Guardian - 100 Faction Rating
+5 Level Scaling
The player is now +5 levels higher than the Region's enemies, no enemy aggro
This idea does revolve mostly around combat. I'm not sure it would be a good idea create a combat progression system which does not involve combat whatsoever. There are plenty of other activities sprinkled in though such as puzzles, collectables and smaller combat-based tasks which may be more to your flavor. If anything I believe this would require less combat to level up than the current bounty system while offering more options for different types of players. But ultimately, someone who loathes combat will have some difficulty in this genre.
Where I read was the same portion of what you quoted in your reply but above that: Acquaintance - 5 Faction Rating
Unlocks the first Raid
Unlocks Campaign Quest
+1 Level Scaling
HOWEVER, my bad, I think my brain froze at seeing +1 Level Scaling because I have to admit I missed the following lines of level gains in scaling. And of course I realize there will be combat... but I still don't like it. I see it as a necessary evil to progress and referenced my mistaken idea that you were suggesting that all mobs forever be red.