Do you really expect Dynamic entities (such as Dynamic lighting/shadows) to be used like that in an MMO? Dynamic entities cause huge performance issues in multiplayer games, let alone MMO's. I know this from experience from creating maps for Team Fortress 2. MMO's have to keep Dynamic entites to a bare minimum or risk having astronomical system requirements. Right now, the only Dynamic entities that most MMO's have are the player/npc's, some have dynamic vehicles. With that said, it is possible to do day and night cycles without using Dynamic entities like some MMO's have done already.

You must have skipped some quests..... because every area I go to for quests, im above the mobs in level or at the same level.