Actually, that's the whole beauty of the relative-power thing. The levels are meaningless in terms of absolute power. As your level changes, your stats do not. Enemy stats don't, either, except in relation to your level. So fighting a level 99 enemy when you are level 100 is identical to fighting a level 9 enemy when you are level 10. Not almost the same, not close -- literally in every way identical. There's no balance challenge relating to levels at all; if it works at level 10, it works at level 10,010.
In terms of the spell tiers and not having distinct visual effects per tier, that was never on the table. When you get a higher tier of launch rock, that's not like getting Fira in a Final Fantasy game. If you're looking for Fira, that would be Launch Meteor. That's why I describe the leveling effect in terms of a two dimensional graph, not a one-dimensional line.
As you gain higher levels, you get access to new enemies, spells, crafting components, and so on. That's where the traditional RPG-style progression of power comes from. But given that we want this game to be infinitely replayable, that adds the second dimension which is the tiers on the spells themselves.
In Final Fantasy, once you have found Fira, that's just it for Fire. In a real fight where you are against competent foes, you'd never use Fire again, it's always Fira until you find Firaga. In AVWW, that's not really true -- once you find Launch Meteor, that's certainly what you'd use against bosses instead of Launch Rock, but Launch Rock would be something you'd still consider upgrading to higher tiers so that you could use it in routine encounters with smaller enemies of your level.
That's the beauty of this system, which is that you get infinite replayability along with a traditional progression without ever having any balance problems that exist only at one point in the progression but not at other points.