My ideal situation is choosing between heavy grinding or fighting a few harder enemies for quicker results (but which require a stronger gear set to survive let alone beat), good gear should be earned but not impossible to come by, and there should definitely be a cap to how much progress you can make in stats by grinding in an earlier section.

Almost every game has taken to including a species list: fliers, tanks, magickers, poisoners, flitterers, elementals, non-elementals, instant killers, undead, etc

Gear is definitely the only aspect of the game which should determine a character's viability against any particular species. Grinding on a species should raise a character's individual viability to an extent until moving on to a new location with a new variant on the species.

Maybe I'm overthinking it.