I've played alot of medieval themed dungeon mod types. I wish i could find a mod that enables a portable light source. A torch/lantern in one hand and a sword/piece of cake in the other. Alright, so there might be one like that judging by the picture on the curseforge home page. It would be nice to explore dark areas and have the light source move with you instead of placing torches everywhere. So i can have my torch, and eat my cake too :)
Another idea: rework the world monster spawning system so that a peaceful mode can be won by defeating a regional dungeon boss somewhere in the area. So you can show up in a non-peaceful region, find and defeat the evil, and win peace for the land :) maybe forever or just for a time. At least until another boss takes his place and the evil starts all over again. A config option for whether or not a regional boss will respawn might be a good idea. It would be nice to find peaceful land without an active boss too, like where a village is located, naturally. I mean villagers should have conquered the land if they are still there. So in a village or just a peaceful region there can be a treasure dungeon, where the risk is high that you might anger or awaken a dormant evil for disturbing the place. As a result causing a regional boss to spawn and monsters to resume spawning normally in that region again.
I liked the free roaming concept of gameplay that elder scrolls had. It mixes with minecraft well. If you attack villagers, they should form a mob and hunt you down. I think a system based on power and experience is overrated. Skill might be a real thing, but one should be able to simply outwit a powerful opponent. Every opponent should have a weakness that makes him/her as easy as pie to defeat. Even the most trained and experienced warrior can be defeated by his/her own weakness. Example; skeletons and spiders are weak to smashing, zombies are weak to decapitation or head shots, witches melt when you throw water on them, slime evaporates with fire, and disgruntled villagers are easily distracted by emeralds tossed on the ground (often causing them to fight with each other over who found 'the precious' first)
Just about every combat game i've played deal with the grinding experience of slowly chipping down the giant health of your opponent. That sort of gameplay can get old.
So those are my ideas. I hope they help.