PvE - Player vs Environment
PvP - Player vs Player

To ans your question why low levels have better euips and stats, that's because they have a main character that has caped the LVL and is already able to get better equipments ( loot ).

They can sell what ever they get from the elite maps and purchase low level gears for fun since they have " Finished " playing the game and their main character does not have anything to do but to just make more money.

I was able to get this explanation from one of my guildies in Lords of War. One who has exp in playing MMORPG's take World of Warcraft for example.

A character's level does not matter in this game, what matters are the equipment ( Weap, Armor, Helm, Ring, Amulet and Pet ). If you have the best that the " In Game " money can buy, you'll be able to more stronger than any other characters.