I think the leveling improved because of this change in .91:

Higher level monsters now give more xp to keep leveling from slowing down at higher levels (if you are killing higher level stuff)

I agree that leveling is much better. Slower near the top, but not nearly as much and it feels like my heroes actually level when winning important battles.

I use all my champs.  I've taken to putting them in different armies simply because they can cover far more territory.  If my mana flow can support it, I'll also use the Tutelage spell to get 25% more XP. 

Now that I'm seeing that killing monsters gives good amounts of XP I'll probably be less worried about it in the early game when meatshields are harder to come by.

I turn them off completely in FE all the time, and love it.

It changes the essence of the game entirely when sovereigns are the only beings of power in the world.  Not only do they feel more important, but troops become much more useful as well.  It also makes the unique play style of each faction really stand out.  Meeting another sov in battle feels epic, and getting one to surrender is truly a feat.

I tend to play henchmen heavy games I might add, and LH is a different story.