You're not wrong, and it'd be a tough game to get into at first because of it, but the following points aren't entirely true:
You can become a shapeshifter, which allows for pretty radical physical appearance changes.
Levels at the very least can be requirements for certain spells if you're pursuing magic - which suggests it might gate other things.
-No way of being able to modify physical appearance (save for clothing, makeup, and hairstyle) unless you do so IRL
-Levels do nothing except act as a sort of reputation/prestige system, and you lose that reputation/prestige whenever you die
You can become a shapeshifter, which allows for pretty radical physical appearance changes.
Levels at the very least can be requirements for certain spells if you're pursuing magic - which suggests it might gate other things.