Give me three things;
Physical Level - Your current Level, so Level 60 Ninja, for example.
Job Level - Effectively the same as Item Levels currently, but not attached to Gear, instead you raise this by simply doing content, similar to a Merit system, albeit far more specific.
Item Level - Working somewhat similar to Morale in PvP, acting as a boost, though with a cap. Item Level 200 would boost you up to to Job Level 200 stats, for example, to open you up to do more content to raise your Job Level with.
Gear effectively becomes something to "train" in, then. The aim would be to cap your Job Level by doing everything. Content would still be readily accessible, you'd just need the gear as you currently do, but the long term goal in the game would be capping your Job Level. 3.0s cap could have been Job Level 210 after Esoterics and Alexander (Savage) were applied, 3.1 then added new dungeons and Void Ark. That would be easier than Alexander (Savage), but it would help people raise their Job Level, as it did with Item Level. The Job Level cap would then move to 215 though, doing everything but Alexander (Savage) would get you to 210 in 3.1. If you'd done Alexander (Savage) and everything 3.0 offered before 3.1, you'd be at 210 already, and new dungeons/Void Ark maintain relevance because of the extra 5 Job Levels they'd provide you. You wouldn't sit there going "I don't need to do Thordan (Extreme) of Anima weapons, because I've already got an i210 weapon from Alexander (Savage)", you'd go after that content to raise your Job Level by 5.
Problems like Bismarck (Extreme) then don't occur. You'd be able to skip over Bismarck (Extreme) in terms of Item Level as we currently do, but in terms of Job Level? No, you'd need to do it still, it would be worth some Job Levels. If you don't do it then you'd never cap your Job Level. Old content like Coil and Crystal Tower then become very relevant, because you'd want to do them in order to max out your Job Level. In the sort term, Job Level doesn't matter, because Item Level will carry your stats. In the long term though, it's a status symbol, something to work on, and ultimately a bonus. Right now the Item Level cap is 210, but the Job Level cap would be 215. People would jump back into Crystal Tower to grind up their Job Level as a result.
Arguably the only problem with this is elitism... You'll see people saying "Must have Job Level X", but... We already see elitism... We already have people going "No Bonus" or "Item Level X", what would a Job Level really change? It would be a significant grind that makes all content relevant. Casuals can ignore it and continue chasing Item Levels. Other than the extra 5 levels provided in our odd number patches, it doesn't really change anything. It's just a long term goal for the "hardcore" players (something entirely missing from the game currently), that can arguably help queues on old and irrelevant content.
Granted, it's not exactly a Merit type system, not the second level of Merits at least. The original Merits in XI were stat based, then they added Job specific Merits. Job specific Merits would be hard to work into XIV though, they allowed for choice in a game with very loose balancing... Here things are balanced very tightly, we'd just get a situation where X Job is best off with Y Merits, better to just cut out the choice ultimately IMO. There is still a choice involved though, it just comes in the journey. The destination is an ultimate cap where you've put points into everything, the choice comes in the journey and what points you prioritize as you're capping.