Im in the same boat as you, enjoying both. I agree that there need to be someting that makes it worth the risk of death by other players and the time lost of running back to were you was questing/farming. Ii just need to be some kind of reward that makes you want to pvp and not flag beacuse its better to pve in pvp mode. Thats makes it awkward for pve only players and can be frustrating. So maybe (im not a game designer so dont have a solution) give a reward for killing other flagged players that isent XP, but more usefull stuff for when we evetually get to max level.
I personally is going to flag most of the time while leveling and don't care if it takes longer than not flagging and just enjoy both aspects of the game even if its not the fastest way of doing content.