Leveling System:
When I look back at my large list containing all RPG games I've played, I can conclude that Gothic series and Fallout I, II and Tactics series hold the leveling system I enjoyed most, even though I'm not particular fond of having your character's HP increasing like 10 times more over its starting value.
I like the idea of having further levels requiring more XP as you level up, as long everything in the game has a fixed experience reward. I don't like at all having experience rewards based on the character's current level, mostly because it makes parts of the world annoying and uninteresting, i. e. when a certain area becomes only populated by lesser creatures there is no reason for the player to linger about. Not only these areas don't oppose a challenge but the creatures present in the them are not even worth of slaying and also, you never know how much experience you will get from slaying a specific creature. Of course this is heavily dependent on how the game is intended to work. If lesser creatures are replaced by more powerful creatures then I guess, if properly done, it can function.
For my game, I plan to have creatures with fixed experience reward, regardless of player's character current level, making sure each creature you slay doesn't feel like a waste of time or boring as it would happen in Age of Conan Online. But Age of Conan online is a MMO so I understand why it is done in such way. This mechanism was implemented to prevent players from camping at certain areas to farm experience without too much effort; it was implemented to force players to search and to explore the world map for areas in which they can continuously develop their characters. This method can also be seen in other MMO games like in WOW.
So which one would be best? I really can't say that A or B is best for all of you, all I know is that the fixed experience is the one I personally enjoy and that feels more rewarding and fun to play.
Scalling:
I totally agree with Vanguard on this one. I prefer to have the player becoming stronger through equipment and skills than simply increasing its HP, mana, stamina or attack power simply through leveling up. I'm also not fond of enemy scaling systems either. If a goblin gets you 90xp and a certain attack power, than make it it so through out the whole game and don't use levels on them. A goblin is a goblin and not a level 3 goblin or a level 5 goblin or level 16 goblin. Thought all goblins are basically the same, you may have a young goblin, an adult goblin or an old goblin, being the adult one stronger than the older or the younger one. And even adult goblins should have their attributes kinda changed a little bit so not every goblin has exactly 60 HP points. Occasionally, the player should encounter an exceptional goblin with exceptional power and endurance, for a goblin that is. Then you have goblin classes like goblin-warrior shamman-goblin etc. to further increase diversity and challenge.
I truly hate having a system where the world levels up with the player's character. This means that the game gets progressively difficult as the player keeps leveling up. Oblivion has the worst scaling system I have ever played. Players could actually end the game at level 1. The best method I've experienced is the one found in Gothic II, where every area was accessible at any time with all sorts of difficult levels. Some areas would be easy while other areas could be difficult or impossible to play at early states of character development, but at least you always had a way to go around. If a certain area was too difficult the player would explore an easier alternative and come back later to explore the harder path. But this method may represent a problem for games featuring permadeath because if this model is not properly implemented the player can be killed at any time without warning. Fun for some and probably frustrating for many.
In my game, although characters level up, it doesn't mean they get immediately stronger after leveling up, in fact, when they level up, they remain exactly the same; leveling up just means players have earned a certain amount of learning points in which they can spend with trainers or teachers to increase they character's efficiency in a certain skill, profession or ability. This means that in my game, players will not be able to open the character's skill tree to learn a new ability out of nowhere. But this is my view towards it. Anything can function if properly done with personal preferences put aside.
As for the player getting too strong, well, level cap should in fact be considered, though I prefer traditional slow leveling up as long you make sure balancing is kept in place. One solution to make this right is to make leveling up costing about X% more over its previous experience level's requirement, over and over until leveling becomes practically impossible to achieve. Of course that the right value has to take into consideration everything in the game has involving experience rewarding like world map size and conflict level. I prefer this method to level cap because it feels more real. Knowing firsthand your character's level limit kinda feels like knowing when you will die.