1.)
Quote Originally Posted by Water_Bear View Post
Yeah, this is a combination of two good ideas (xp tracking / group level advancement) which comes out to a really awkward idea. Like a peanut butter and salsa sandwich.
Peanut butter and salsa are delicious together.

2.) Y'all are missing possibly the biggest problem with this: negative level effects. Lots of undead or spells drop your level with a touch, and I see no way to make a mechanic that works smoothly and is anything like good to deal with this problem, short of not using those spells or enemies.