I've already done parts of this here and there; however to put it more formally, I'm thinking that effects of leveling up should be decreased for the player.

If we want the player to be able to amass massive amounts of stars, things such as speed need to become more reasonable(at high levels), so that you can't just tap left and jump all the way across the screen.
Merlin already has an advantage over others characters for becoming stronger such as potions, spells, and being in every room(likely accumulating experience) so making his leveling stats lower makes sense for him to be closer to equal to other characters.

This would also benefit map makers, in being able to more directly control merlin's strength with potions.