The most meaningful importance about keeping as low levels as possible is that you can exploit later on the game the Stat Bonus abilities. To be succinct and precise let me give you an example.
- Squall at normal level 100 has a base Strength stat around 50 or somewhat less. Recall now that you take control of Squall at around level 7 (if I don't miss my guess).
- Think about keeping Squall at that level until you get all the Bonus abilities and think about using e.g. the Str Bonus ability to gain one Strength point bonus per level up. You can see the difference of getting Squall at level 100 AFTER you have the Str Bonus ability and constantly have it equipped. He will have a base Strength stat of around 140 or so. With this, just by equipping the Str+60% ability, you get 224 Str WITHOUT junction. After that, even a simple Thunder magic will get your strength to 255. This way, taking it easy on levels early in the game can lead you to extremely strong characters, let alone there are Vit, Mag, Spr and HP Bonus abilities as well and in fact they all appear twice in the game so that you can level up two characters at once.
- If you need the random encounters for the drops, mugs etc. your best bet will be the Card ability for a long time. Carding the enemies gives you the drops and the AP but NO Exp. As such you can be kept at low levels practically forever. There are few fixed fights that give you exp. but thankfully no bosses and Cactuars also give extremely few Exp. Points so that you can use them for AP farming since to gain one level you have to defeat about 80-90 of them.
- Getting at level 100 only raises your stats 20-40 points the most. Leveling Up is not the way to get stronger. Careful and precise junctioning and ability equipping is the key to being effective in battles.
- Enemies level up exactly as you do. But their stats don't increase as slow as your characters'. Some enemies at level 100 over 100 Str points more than when at level 10. Good thing the enemies cannot junction their own Magic. Hehehe...
- Of course there also are the useful Stat Up Medicine, which, if you know how, are not too difficult to create except for some specific like Mag Up and Spr Up. Still there is the Devour command ability so that you can get even stronger.
- If you have trouble getting Exp. points for the rest of your players just think about visiting the Islands Closest to Hell or Heaven, or maybe the fixed Elnoyle fight in Esthar. Other enemies are good too, especially with Tonbery's LVL Up ability, so that you can get even more Exp. from each enemy while you are still at low levels.
After all, it is up to the player to decide whether he will Level Up or not. The Bonus abilities just show up later in the game and cause a big disappointment like "why haven't I gotten this earlier", especially for players of older FFs where each level up was enough to make the difference and were, as such, misled in doing so in FFVIII too. Just remember, you can get an awful lot stronger and more effective through junctioning and correct ability use than by counting on high levels.