You get more privileges when you level up. I will list them here for your viewing pleasure.

Level 1-19Edit

Level 4: The quest "Gaurdian Sprite Upgrade" appears for the first time.

Level 5: The quest for making friends appears for the first time.

Level 6: The quest for getting a pet appears for the first time. Finish the quest to get your first pet! You also recieve a Broomstick mount in your Level 6 gift pack! 

Level 9: By finishing the quest in the Beach Resort, players learn to chat with friends and team up with them! Team up and gain EXP! 

Level 10: Players can learn what a mentor is, and how to get one.

Level 12: The quest "Sprite Evolution" appears for the first time, where players can select their classes and skills.

Level 15: Guild-related quest appears. 

Level 17: Players can get quests related to Paradise Island, which is a paradise of pets. 

Level 20-29Edit

Level 20: Class chain quest becomes a daily quest (3 per day) and offers good rewards. There is also "Explore Magic School" quest.

Level 21: There is quest "Play with Pet", where you can go to Paradise Island to upgrade your pet.

Level 23: The quest "Pet Farm" is enabled, an instance where you can upgrade your pet.

Level 24: Players can earn badges, which will give you a stat boost if equipped.

Level 25: Another "Gaurdian Sprite Evolution" quest, to upgrade your sprite and attain new skills!  

Level 30-39Edit

Level 30: A quest to get an apprentice! There will be surprises for your honor as a mentor. Also, players can accept "Guild Chain quests" which offer a huge amount of EXP. The quests in your Guild base can also improve your strength.

Level 32: A quest to find the traveling merchant, where you can explore the Dragon Cave. 

Level 35: There is a quest to challenge The Dark Shrine! 

Level 40-60Edit

Level 40: Allows your sprite to evolve to phase III to make you stronger!

Level 42: The quest "Irritable Snow Leopard" where you can get Titan Roots, and improve your stats.

Level 45: The quest "Challenge Frost Heart", which offers a different feel to what you originally experienced in previous instances.

Level 50: The quest "The Wilderness", a beautiful and also incredibly different kind of instance.

Level 54: The quest "Challenge Sacred Stone Shrine", which is a slightly more difficult instance! Let it improve you.

Level 55: Your gaurdian sprite may evolve again to phase IV! It will be incredibly strong.

Level 58: The quest "Thorn Quagmire", which is a Boss challenge. Amp up, and kick butt! 

(Courtesy of Alfheim Tales Official Guide)