Levels grant you more HP of course, you will cap out at 9999 at level 99. They also affect your OE board, roughly every two levels is equal to one more level you can go up in abilities up to a max of 25 on the board that you reach at level 53. You can reach this sooner if you link the same skill, like a level 13 and 12 pre-raise next to each other let's say. This is generally a bad idea however as by Deadly you're going to want nine separate abilities all at level 25. The level also affects the damage dealt by certain moves like Kill Boost and Energy Shot, an it also affects how long you're in Liberation mode with a higher level giving you more time.
Playing: Resident Evil 4 HD, Muramasa the Demon Blade, Metroid Other M, Dragon Quest IX Sentinel of the Starry Skies. PSN: jext77