>>47338206locking your pokemon at a level for battling takes away too much enjoyment of using your dudes in a fight. You're denying the reward you've earned from raising them.
It's very difficult to punish loss because healing your team is very easy. Even if you are out of healing items it isn't hard to get to a pokemon center by backtracking and running from wild pokemon. Reverting to the last save is the most basic punishment.
Here's a solution. With the idea that you have to fight an opponent with the same number of pokemon they have, you open up the possibility of losing pokemon battles without your entire team fainting and reverting your save. Losing fights loses money and makes it harder to buy healing items, which makes it harder to advance without backtracking to pokemon centers. Pokemon that are fainted at the end of a fight don't gain xp so you're motivated to heal them which costs a turn and puts you at risk. Healing items aren't very expensive except early game so later in the game you start fighting people with larger teams which makes it easier to lose your entire team and revert your save. The way to counter this is to save often, so limit saving to certain buildings or areas or with a special item which costs more money. This makes your money the big indicator of how easily you can advance without overleveling your team. Lessen the ease of earning money or widen the amount of space between pokemon centers to increase reliance on healing items. Increase the amount of items you can purchase in areas to incentivize spending money.
Basically have exploration be like Final Fantasy in that you have to go longer periods between pokemon centers and can't save so you risk losing progress. To heal your team you need either items or pokemon with healing moves which are hard to come by and take up space.