Also on the concept art end: Square Enix put some of the concept art for "The World Ends With You" (aka "It's A Wonderful World") up on DeviantArt.
Update on my current project: Still modeling things in Blender, but we've changed the engine. We're using Unity
now. It's wonderful.
It does require some programming knowledge to get scripts working, but even before that, you can make some beautiful terrains very quickly, and it's got a first-person player controller script built in, so you just slap that on the camera and wander around... it's great (and free for non-commercial use)!
Re the "level up" idea, Vagrant-- it's interesting, but I think it needs more limitations. More in the comment I left on the post.