Honestly it's a matter of creativity. Being creative here means being able to solve those issues with the tools at hand. If FFXVI proved something is that Yoshida might have leadership skills, but his game design philosophy is as you say: safe and dated.

Take a look at how GW2 deals with the leveling part of the story: You get to do MSQ segments every 10 levels, and the level cap is 80. There's plenty of quests in those segments but most of them have gameplay in them. How do you level up? You do Hearts, which are essentially static FATEs that can be done only once per player and essentially act as yellow quests, presenting lore in a "show, don't tell" style; you can also participate in Events (FATEs with other name) and most importantly, exploring and discovering stuff, meaning that filling the map is actually satisfying and fun.

This particular style of storytelling world have worked wonders for DT and for the whole "vacation and adventure" narrative that was promised. You can't tell me they couldn't have done the same with the resources they have.