I'm on board with all of the OP's suggestions except making gear upgradable. That's the one idea that I feel would do more harm than good for players. Simply look at WoW's artifact system in the past. If there was a way to do this that wouldn't leave out players who have less play time than I'd be all for it.

I think the merit system is an excellent idea. And while some may insist that getting free stuff is just trash upon trash, I do not see it in the same light. You can sell it or use it in crafting, if it's a crafting ingredient.

Maybe tying the merit idea in with an achievement system would be the way to go. Provided it has decent rewards.

Most ideas, not necessarily the OP's, will inevitably exclude some from being able to enjoy the full extent of the game. Unless those rewards are cosmetics, minions, mounts, music rolls, freeby teleports, or freeby foods. This is where games like Warframe have the right idea imo. Their end game isn't really anything more than a fashion show, yet it makes them a sizable income every month because of it.

It all comes down to providing an enjoyable experience without gating.