Leveling up reduces a gap between you and opponents of higher levels. This can be using the "Linear" or "Proportionate" scaling type offered in the game PDF, and I also encourage players to homebrew their own algorithmic solutions to scaling up Obstacle difficulty/HP/damage if the basic "Linear" or "Proportionate" does not suit their taste.
Basically, your character's stats do not represent their over-all power scale, but rather their specific frequency of succeeding (controlling their own fate) when using that aspect of themselves against an evenly-matched challenge
For example, with the "linear scaling" option, a character with 3 POW and Power Level 1 trying to break a Power Level 10, Difficulty 2 rock wouldn't stand a chance. But a character with 2 POW + Power Level 10 would have much greater odds.
So, the advancement is much more tied to the Power Level number itself than the individual Stats; the Stats just represent their overall specialization for that type of challenge.
There are no rules against changing your own Stats when you see fit, so you can always play around with it! But the game will work more consistently when you prefer to advance your character through Power Level and Assets instead of Stats. When Stats increase much beyond 3, you are basically hitting Success all the time against an evenly matched Challenge or Obstacle. But for some characters (A "Superman" or "Hercules" type character? xD) this might make sense. But it might not be very fun to play.