If you do this in every daily area (with an FFA pvp area) I believe world pvp would flourish.
I do not think so. You can be a good PVPer but do not understand how it works. MMO it's not the Olympics, and the problem of good developers so mix of all players in one place that everyone could enjoy equally. If you filter out the players for their skill (punishing them fine as you suggest, or introducing rating) that can be found out very quickly that you did not master. And then what? In any case, even if you're super cool, your PVP completed within 10 minutes capping one of the respawn site. And you sit there and sad to see each other. The idea itself is buried.
As an addition to the FFA area can make weekly quest to kill 50 people, for example. It will be enough.
And yes, for the hardcore no important awards and goals, and as you yourself say. So you have to be satisfied with having killed someone somewhere.
upd. I like PvP in TOR (there are certainly moments that I do not like) if I wanted realism and full loot, I would play EVE