When it comes to physical zones, yes I'd much to prefer to have something like South Horn instead of MSQ regions. Large interesting areas that aren't randomly gated off.

I'm less interested in the enemies. While they are more threatening they're still just kind of there. I think the problem is that FF14 combat being so heavily rotation based gets dull when enemies die quickly and there are breaks between short bouts of combat. There isn't enough time in combat with field enemies to go through a full rotation and there isn't enough time for the enemies to do anything beyond casting one or two simple AoE. I end up avoiding them because that's the most fun way to interact with them - don't. Bosses are properly threatening and engaging though as repetitive and obscure as your typical FF14 boss.

A FATE driven area could work but FATEs themselves need some revisions. Some of them should be longer. Much longer, bordering on persistent. They could be multiday events that players could join and leave without needing to rush to them all the time. More could be done with FATE positioning as well. There are some mobile FATEs in the MSQ areas. Take the concept and add fights that can be dynamically moved around the zone. If players are losing the FATE moves on way, if they're winning it goes the other, and as locations change different environmental effects come into play.