I think the prevalence of magic has much more impact than its power level. Eberron is a good example of a setting where magic is ever-present but not necessarily super-powerful.
You suggested that town guards are 9th-10th level. that similarly suggests that everyone who does work in "defense" is of similar levels: you have 9th or 10th level clerics, rangers, paladins, druids and wizards/sorcerers running around in society on the regular. And in the shadows, their dark counterparts like assassins, thieves, warlocks and cultists will be similarly leveled. This says that magic will be extremely prevalent. So we are kind of back to Eberron.