There are no levels.

I don't know if NPC skills will progress. Each will be uniquely tracked by the game engine, so it is possible for that to happen.

Mobs will not have levels, but might progress through life cycles the same as NPCs. See the Game Guide for more background.

There will be attributes that control something like hit points, but I have not heard exactly what the relationships are.

I don't know anything yet about targeting specific body parts in combat.

There will be combat advantages and disadvantages based on different values for attributes and skills. I don't think the exact mechanics have been published yet.

Please read the Game Guide, if you have not already done so. It may not answer with the detailed specifics you want, but will give you a general idea of what the game is trying to be.