Many quests, according to the narrative are urgent, require you to act now and yet, there'll be no punishment if you do a ton of side-quests before getting to the said quest. I'd say that'll add some dynamic to the world. Make it... somewhat alive;
I beg you, don't add new levels of loot in DLCs (if there will be any). Makes the whole grind pointless (Borderlands 2, 3 - best example of that);
Don't make a giant gap between levels of enemies. If the player is 1-3 levels lower than an enemy, make it hard, but not unbeatable. S'pouse this can be applied to items too. Can't help but feel broken when I gotta sell my trusty sidearm (sword, whatever) cos it's useless now. Giving a chance to level up your favourite item at a considerable price would be nice;
The enemy is 5 levels higher so we'll fiddle with some health/damage values and that'd be enough. Why not differentiate enemies' fighting patterns on higher levels. Such as usage of nades, suppressive firing, new moves, shielding, etc.
"You can't do it now". "BUT I WANNA CAST AXII DURING THE FIST FIGHT". Don't restrict some unwanted actions during certain conditions. Casted Axii during the fistfight? Get kicked out of fistfights and be branded as a "cheater". Just make it clear to players that villagers don't appreciate using witchery stuff in a fair fight.