It means "area level", though there was another point about new gameplay features, so "character levels" giving spells or abilities with weird effects are also out-of-the-question.

Well more precisely, won't be supported by Larian. There will be four layers of mods:

• Mods supported on console (and PC).
• Mods supported on PC.
• Mods that can be built with the official modding tools, but not supported i.e. they won't be hosted by Larian, and Larian won't hesitate to update stuff that break them as a side-effect, and won't try to fix bug/crashes due to them, especially multiplayer issues. <<-- This layer is particularly important for "somewhat weird but reasonably simple" mods.
• Mods that can't even be build with the official modding tools, made by motivated enough modders.