Another system is instead of fixed intervals of levels with sudden strength boosts, you can gain strength in a more natural and granular way.
Instead of every 50 kills you level up, every level up suddenly gains you 10 strength and a "LEVEL UP!" message, you just get +1 strength every 5 kills. Though, leveling up can be akin to getting a reward in games. "LEVEL UP!" can be a sudden moment of glee and excitement (especially if your EXP bar isn't constantly visible on the HUD and you weren't expecting the level up).
About grinding vs fixed intervals - not only is there joy in achievement ("Yes, just hit level 30!") and of increased options (".Now I get to unlock the third tier of my skill tree!"), there is also joy in overcoming challenges (killing a boss and getting rewarded with the boss's ability, or the "treasure" pre-fixed skill the boss was "guarding").
There is also skill is discovery - skills and powerups can be hidden in games. Many RPGs have items that give a permanent +1 to a specific stat (a "Strength Boost"/"Strength Book"/"Strength Seed"/whatever item) - but some games have hidden skill points to unlock magic. Imagine walking through a dungeon, and suddenly discovering a Fire Crystal that gives +1 to your Fire elemental magic, letting you get a new Fire ability. What if it is in a secret room? What if the game doesn't ever give you skill points from combat, and all skill points must be discovered through exploration? King's Field for PS1 did that (my fav game) - you find Fire, Wind, Water, Earth, and Light crystals throughout the game world, and that's the only way to get new magic abilities. You still level up your stats normally, but all magic is gained through exploration only.
In Quest 64 (another one of my fav games) you level up normally, and each level up gives you one skill point to put in to one of the four linear skill paths (Fire,Water,Earth, Wind). Quest 64 also let's you find "wisps". Wisps are scattered throughout the game, and each one you find gives you an instant skill point to put in.
These two games aren't the only games that mix normal leveling with instant-bonus leveling from exploration.
Personally, I prefer a mix of different methods of progression, but I like them to affect different areas of my character. Maybe combat to enhance basic stats, exploration to unlock skills, and fixed points (i.e. after each boss, ala Legend of Zelda) to gain more max mana or max health? Something like that.
But it depends on how the rest of the gameplay is. I really liked Paper Mario's (N64) badge system, where the equipped badges are your passive or usable skills, you find the skills via exploration, and each time you level up you choose between more max mana, more max health, or increasing the number of badges you can have equipped at once.