So my only counter argument to the exploitation issue is that pretty much any RPG is exploitable in the same way. You can spend 5 hours in Palette Town grinding pidgeys until your level 40 and continue on. There isn't going to be much I can do to prevent people from grinding in some way. Whether it's scavenging, combat or some other thing. Unless I do the Witcher III thing and have quests be the only way to gain XP but that seems harsh for a game that I'm intending to be a little casual.
I think the system probably feels a lot more problematic right now because things aren't balanced yet. The systems are really bare bones and I haven't balanced item values or the required cost to level up. It's all very theoretical at this point.
The main thing I'm trying to emulate with this system is Dark Souls 'souls' systems, because I love how they handled character progression. I could get really deep into why I love that system but the TL;DR version is that having all of your character progression hinge on a single resource (souls) instead of two (xp and gold) is something that I find brilliant. (I'm admittedly making it a little less clean because of the aesthetic and narrative choices.)
The reason I'm going for that is because I want to let people have options about how they play. If someone just doesn't like fighting things and wants to just forage and do fetch quests here and there then they can play like that. If someone wants to be really aggressive and fight everything that's okay too. And if someone wants to just be horny and flirt with every monster they see, then that's how they can play. I don't want any one play style to be exploitable and I don't want to encourage endless grinding, but I do want people to have options. That said in the future builds as I flesh out content I'll be readjusting item values to better reflect the challenge/reward relationship. Items gained through combat will generally have a higher value then items found through foraging. Stronger monsters will drop higher valued items, and items foraged from more challenging areas will have a slighter higher value then items foraged in easier areas. With that the required 'xp' will increase with each level in a exponential growth rate to force you to go to higher level areas lest you spend 30 hours grinding.
I do also intend to add a unique item(s) either missing pages or golden apples or something that have a base value of 0 but when traded with Vacdes specifically will have a much higher value. These will be used as rewards for beating bosses and completing major quests. This like most things at the moment having been added because I'm slow.
With that said I'm also going to be adding shops which you can also trade your items at for new weapons, armor and skills. To go back to the Dark Souls thing. In the same way you can improve your character by spending souls to level up your stats, buy and improve armor and weapons. You'll be able to do the same thing here only using 'loot' to trade for new weapons, armor or selling to Vacdes for stats.
I hope I understood what you were suggesting correctly and I hope this explained my thoughts and plans properly. It has been a long week and I'm running on fumes at this point. So if I just rambled incoherently I apologize. But I really do appreciate here your thoughts and I love having the opportunity to just ramble about my design choices and ideas!