I know that this thread is about "PVP rules," but each of points relate to PVP in their own way.
What I would do is have it so that skills take a long time to increase (say, exponentially), but there would be many different skills and subsets of skills so things don't become too linear and people can mix and match.
Then, I would allow someone to pay offerings to their diety/totem/whatever (however it'd work for the lore) to protect them from loseing skills upon death, and this would have to be repaid each time they die. Which gives the players choices.
Then, I'd have it so that equipment degrades at a "reasonable" rate through normal use and also random (or based on hit boxes) armor pieces take massive hits to durability upon death. I would allow for a limited number of repairs, but each time it's repaired there are minor hits to the equipment's stats. This will make players think about whether or not it's worth wearing a piece of equipment and it will help to get items out of the game so that they can be replaced by crafters. I don't think anyone LIKES losing gear that they work hard to acquire, but it's a necessary evil in a game that has a player-driven economy.
I would have it so that some common materials are found everywhere, but rarer materials are found only in certain areas. This encourages exploration, trade, and conquest.