Wasn't it pointed out in the Chunin exams that crop that made it through the forest was on the whole considered exceptionally talented. And the final twist of the exams was that you don't rank up simply by being a badass. I dare say surviving the forest part of the test was probably the de facto competency exam. So it was pretty well established that the rookies were all capable of already fighting at a high level.

Though thinking that far back... the heck ever happened to the Sound?

I seem to remember it having a canonical country/territory it represented and the hide outs we saw were not exactly well populated so where Orochimaru got those "jonin" mooks from the invasion. Are we supposed to believe the whole of his forces were wiped out in that or something.