I do not understand what you mean by granularity.
Higher level characters have more options. They have more feats more powers and substantially more wealth. With classifications that define the power of creatures like minion, elite and solo in addition to standard foes plus their role as combatants gives a tremendous amount of flexibility. Math beyond a 5th level character is unneccesary. It would provide for foes far weaker and foes far stronger than the PC's(1st level and 10th level respectively). You would only need to decide what power level a given monster would represent. Characters would still have levels and level based powers. Just the math would involve smaller numbers.
But, if you have a smaller range of numbers, there has to be a maximum ceiling that is smaller than with a larger range of numbers. That's pretty much obvious.
So, if you only have a range of 1 to 5 (to pick a range) then you can only have 5 possilble target numbers. If you have a range of 1 to infinite, you can have infinite target numbers.
The presumption here is that all encounters, whether combat or not, will always be exactly the right level for the party. That's simply not true. Once you reach a particular level, you need a range of options from about -5 to +5 of that level. You could go further, but, it's not really necessary.
Unless you start having one level be exactly the same, bonus number wise, as the last level, you have to spread out the numbers. So long as you have levels, and you want to have each level actually be different from the level before it, you have to increase the numbers.
If you force the game into a particular band of numbers, then you have to "squash" the levels in between those numbers.
Exploder Wizard. I like the idea. I would personally go for it. There is a flip side to this though. If the DM is thinking "After you adventure, we're going to shift the campaign into kingdom building" and the players aren't on the same page, there is a danger of bait and switch. So long as everyone knows beforehand, then groovy.
However, I wonder if D&D is really a good medium for this. I'd much rather move over to a system like Reign if "Kingdom Building" is going to be the new campaign. Aren't you basically ending one campaign and starting a new one, just with familiar characters? D&D's economic system (regardless of edition) would make this sort of campaign very difficult to run I would think.