I think that the "quest hub" style leveling is definitely more interesting than npc grinding. Where games like WOW have failed, is that they often punish grouping in such a way that its never actually faster. There is a lot that can be done to make questing group friendly...
1. No exp penalties. If you'd get 500exp for killing a mob solo, you should get 500 for killing it in a group.
2. Zone bosses. Similar to the dynamic zone bosses in GW2 -- except that they should require some amount of coordination. Have them award large exp point bonuses and loot chests for every participant.
3. Level-up Dungeons that do not require a "holy trinity". The key here is that you and any group of friends can get together and just do a dungeon instead of spending hours looking for a tank and/or healer. You make it fun by focusing the challenge on avoiding traps and mob mechanics than just needing to heal bomb the tank.
4. We know that Behest are being redone. My hope is that it becomes entirely "open world" and the quest hub is truly under siege. They could encourage player participation by including a zone wide buff for successful defense. Again, it should require coordination and strategy so that players have to communicate to succeed.
These are all old ideas and things that have been done before. In Guild Wars 2 there's these huge bosses in the zone that require grouping but everyone just dog piles on top of it and spams 1+2. All these game have instances but you often can't find anyone to heal or tank so a lot of folks just don't bother. If the content isn't inviting and doesn't encouraging players to talk to one another then they won't.
All these, supported by a great content finder, would definitely encourage group play. The idea being that you can solo to 50 just fine but you are definitely missing out if you don't group.