Flying is a huge part of the problem that I agree with. I also think adding flight was a horrible idea and it is horrible in any mmo and should be removed. Simply because it negates the whole world.

The other thing is the open world is worthless outside of honestly leveling and some vanity gear. It just has no real purpose in terms of gear progression. It is why people play FFXIV as a lobby server game for the most part. So want to make the open world worthwhile. Stop instancing all of endgame and remove flying. If you do not want to do that... the world will only be alive for a few weeks to a month tops after each expansion launch.

So in all These things need to change to fix the world:

1) Add Relevant Top Tier Endgame Content to the open world
2) Remove Flying from the majority of zones. Unless the zone is specifically designed for flying. If it has currents flying should be removed as the zone functions without it.
3) Add some areas designed for groups in the open world. Aka mobs that take more then 1 person to kill. Objectives that reward people to go into those places. Aka Extreme beast quest or something that reward more then a housing item and flying pig. Guild Leve quest/Forced spawned high tier mobs that are boss/raid tier difficulty fights. and so on.
4) Increase rewards for doing open world content to compare with dungeons. Aka add worthwhile leveling gear as Fate Rewards. Atm the xp gained in the open world just sucks horribly compared to spamming instances. So you get gear and more xp in dungeons, why would you do anything else?
5) Fates are fine... EVERYTHING BEING FATES IS NOT. Make new openworld content that is not fates.

Atm there is just no incentive to go into the world outside maby a rare S rank or maps. Games where the world matters have it where the world is a significant focus of the game. In ffxiv atm all the best stuff comes from instances. So why would anyone want to go into the world for anything besides unlocking the instance and doing the main story line.

But lets be honest... FFXIV has been following this path for this long, nothing is going to change. Making the game world a focus sorta goes against Yoshida's philosophy of ease of game play and being able to jump into it and out quickly. The instance model fits his game design mentality a lot better as people can log in press a button do a few instances and log out.