I don't think levels are meaningless. Yes, it's not that hard to get to level 20, but it's still a journey. I think that rather than create meaning over being level 20, you want to destroy what meaning already exists in being level 20, and that's wrong-headed.
I also think that the answer to the question, "How do I face the horror of the setting?" should be, "Go out and be heroic/villanous!" or "Make connections and talk to people!". Not "Wait".
You want things to be fun and engaging, and you want to remove mechanical grind? Laudable goals. Why then throw out the baby of roleplay XP with the bathwater? Why reward doing nothing but existing? How is that fun and engaging?
If it takes like, just short of, or around a year to hit level 20 for someone who has the real-life lifestyle accommodations to reliably play NWN enough to find enough parties, or has a enough friends to log on together and grind with, then it's not any different. It's a very gamey aspect of the server that's supposed to be roleplay-oriented. I'd realistically ask what that journey is supposed to be, however.
If killing Werewolves, fighting Demons, and slaying eldritch terrors, putting ancient, corrupted Baelnorns to rest was taken as actual experiences of value and merit, I'd agree that we're losing something significant. However, those are treated as fairly normal pursuits. No supported setting will care if you have done these things, and in-fact, they do the opposite -- Bringing them up at all will see you ostracized, in Dementlieu, you're crazy, in Barovia, you're just ultra-outlander and OOCly you'll be harried for even being in the region past the acceptable level range.
I had several Gendarmes that achieved level 20 through sweaty, excessive RP XP past like level 14 -- My grinding loop used to be speeding to 14 and then engaging in idle RP in Dementlieu with an occasional delve into the under-city while playing like, 10,000 hours of the game. I put 10,000 hours into PoTM while I was unemployed/partially employed with nothing to do, and I leveled several characters to 20 through dropping paragraphs like it's going out of style and some DM Events/XP. Yet, now my character, level 20, has the same power as someone who has relentlessly hunted hordes of Demons.
I guess at the end of the day, I just empathize more these days with the fact people have lives, and PoTM often asks too much from people with a great deal of life responsibilities to enjoy its' end-game content anymore. I know I basically plan to never manage a level 20 here again, because it's asking too much from me, and I just don't think it's that rewarding to begin with.
So now the question I ask you is:
How is the journey objectively altered, if the time to level 20 is the same, but the means are changed? When examining the paths to 20, through grinding, through RP XP, DM Events, etc; The goal is that a PC can achieve 20 no sooner than one year, thereabouts, it seems. The limitation from there, is how much can the player keep their attention span on the mark. If that journey was spent engaging in roleplay goals, rather than basing your life around yellow text and xp ticks, would there not still be, a journey?
EDIT: I forgot to reply to the engaging and fun part; Imagine playing Barovians that didn't have to break character to dungeon, or Dementlieuse that didn't have to wander beyond Dementlieu to be strong, that could naturally level up in their domains and engage with the content and roleplay there first and foremost, without having to break their worldviews or cultural taboos? The NPCs certainly get to, so why not you?