To be honest an rpg is about the journey in which you level while taking in the story, so what would be so wrong to be able to do quest and follow a plot while you level? I can understand why he wants to get rid of the whole grind on x mobs and chain them to reach 50 because what kind of journey is that, that's just a Rocky montage cue the music! You train and train and train then bam you're ready for the big endgame but you didn't really do anything engaging to get to that point.

I think one thing that may be missed from the idea of progressing through story is the idea that more class quest will be added which test the users abilities with their current skillset so there could be challenges had with that in mind. Or perhaps even challenges where you start with less HP, MP, attribute, spell recast is doubled etc. They could be VERY creative with the leveling process through quest it doesn't have to be a straight line it could be a wavy line of multiple challenges and handicaps put on the user to really test their skills and make them a better player when endgame comes.

You have less HP, well you are more focused on keeping your HP up as well as dispatching the weakest enemies as quick as possible.
You have less MP, you are more cautious about using strong spell so you focus on the cheaper ones and figure out the best method to dispatch the foes in front of you.

There really is a lot they can do with it so hopefully they are creative with quest and it does have that "rpg" like story feel where sometimes you are handicapped in a given situation which would not only add tension in said fight but also help to make players better skillwise since it would challenge them to have to come up with different battle methods or to be able to perform certain battle strategies based on the guides they read.