Link and Zelda starting powers
Now, you may ask, what is a Courage Power Attack and a Wisdom Power Spell, you may ask? And why do they have numbers in the upper right corners of the cards (where the Magic: the Gathering casting cost would be?) They're not Legend of Zelda-specific Action Points. During the course of play, Link can accrue Courage points, and Zelda gathers Wisdom points. They can spend those points to use their "Power" attacks and spells. While they each only have one "Power" ability, they will learn more throughout the campaign.
So, with the "Number of Hearts" mechanic replacing "1/2 Level", and the unlocking of new powers by learning them in-game, we've pretty much done away with "levels" as we knew them in D&D, but still have a way for Link and Zelda to grow more powerful.
We also no longer have to worry about experience points. Now, how do Link and Zelda gain Courage and Wisdom points? I'm thinking that an at-will attack that hits and does damage is worth 1 point. Slaying different creatures will be worth between 1 and 5 points. I think they will also be found in breakable jars and crates and skulls throughout dungeons (though they will probably be pretty rare).
Next up in this series: some monsters for the first area and the first dungeon, and probably some discussion on what the plot should be.