I think if you want to brainstorm ways to encourage PvE folks to flag for PvP – beyond the existing XP benefit – you need to first brainstorm ways to keep folks from being trolls about it.
When you have level 30+ folks waiting outside the gates of the starting towns, prepared to gank lower-level players who step outside flagged for PvP, you’ve got behavior which discourages anyone from actually flagging. I know I tried during one of the betas to go flagged permanently, and I spent an entire evening being killed every time I stepped outside the gates, because I was level 10 and there were four level 25 folks waiting immediately outside, until I gave up and unflagged.
As a result, I’m definitely not flagging PvP when I actually want to get my main story progression done this time around.
And as long as there’s nothing working to stop trolls from doing that, scenarios that enforce PvP flagging are only going to earn resentment specifically because the people for whom PvP means “lol I can kill the babies” (as opposed to “this provides an element of challenge and strategy to actually operating in this game”) will deliberately work to take advantage of those situations.
Look at EVE Online, which is all-PvP-all-the-time, but has a concept of star systems with high security (hisec), low security (lowsec), and no security (nullsec). Attack someone in hisec (without paying off CONCORD to look the other way by buying a war declaration), and the NPC lawkeepers will almost certainly vaporize you. This means players who want a chance to build up resources and skills can do so by sticking to hisec, and those who try to PvP troll them there (waiting at the starting starbases to blow up people in their first ships or whatever) will quickly be nuked… but all the profit to be had is in losec or nullsec, so you can’t really excel if you just hide in hisec.
Anything where you have enforced PvP, you need some sort of buffer, some sort of limiting factor on PvP when it comes to power differential, that lets new players actually get their feet under them and get started. Otherwise, new players are just chum in the water for trollsharks.
And chum rarely sticks around long.