The current version of Cure Wounds already embraces the notion of casting in higher level slots for more healing. Would giving the spell touch range and building "distance spell" right into the spell for +1 or +2 levels be an acceptable compromise? Or perhaps it is the one that leaves neither of you particularly happy, especially since it means there is more than one possible use for casting a spell in a higher-level slot.
My own preference is that the more-or-less minimally useful version of the spell to be the base one (perhaps even a cantrip) and then give each one a balanced (i.e. neither too deep nor too broad) tree that the character can choose to expand upon in some way with training. "Universal" improvements like range, casting time, intensity, number of targets etc. can be baked into the spell itself, while those that depend more on the nature of the caster (domain, shared faith, special training, etc.) and don't really affect the fundamental utility of the spell can be done as feats. I like the idea that some casters learn a dozen unique spells, while others might learn only 5 but really flesh out what is possible with those 5. (This sort of thing is more common in systems with point-based character advancement, but often that is in an attempt to be a universal mix-and-match system, while here they can be a bit more tailored to individual spells or themes. Plus, it greatly reduces the need to design entire new spells from scratch every time a designer thinks of an interesting wrinkle.)
In my homebrew Heal scales from a standard action touch-based spell to a high-level minor/reaction/quickened/whatever ranged spell that affects multiple targets. A cantrip like Light starts as a minor action short-range spell that lasts for 10 minutes, but improvements include longer duration, multiple sources, light cast over greater areas, overcoming magical darkness from weaker sources, visible only within the light itself, and even cast shadows from invisible objects. Even a simple non-combat cantrip like Rapid Reading (cf. Scholar's Touch) which counts as a "single solid reading" of a few pages as a standard action scales up to a high-level version that grants perfect recall and understanding befitting "significant study" of up to many thousands of pages. In all cases the caster specifically opts-in to those extra abilities, and the basic version of each spell tends to be very simple, so I feel the increased complexity enters very gracefully.
My own preference is that the more-or-less minimally useful version of the spell to be the base one (perhaps even a cantrip) and then give each one a balanced (i.e. neither too deep nor too broad) tree that the character can choose to expand upon in some way with training. "Universal" improvements like range, casting time, intensity, number of targets etc. can be baked into the spell itself, while those that depend more on the nature of the caster (domain, shared faith, special training, etc.) and don't really affect the fundamental utility of the spell can be done as feats. I like the idea that some casters learn a dozen unique spells, while others might learn only 5 but really flesh out what is possible with those 5. (This sort of thing is more common in systems with point-based character advancement, but often that is in an attempt to be a universal mix-and-match system, while here they can be a bit more tailored to individual spells or themes. Plus, it greatly reduces the need to design entire new spells from scratch every time a designer thinks of an interesting wrinkle.)
In my homebrew Heal scales from a standard action touch-based spell to a high-level minor/reaction/quickened/whatever ranged spell that affects multiple targets. A cantrip like Light starts as a minor action short-range spell that lasts for 10 minutes, but improvements include longer duration, multiple sources, light cast over greater areas, overcoming magical darkness from weaker sources, visible only within the light itself, and even cast shadows from invisible objects. Even a simple non-combat cantrip like Rapid Reading (cf. Scholar's Touch) which counts as a "single solid reading" of a few pages as a standard action scales up to a high-level version that grants perfect recall and understanding befitting "significant study" of up to many thousands of pages. In all cases the caster specifically opts-in to those extra abilities, and the basic version of each spell tends to be very simple, so I feel the increased complexity enters very gracefully.