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I'm wondering if reputation and quest completions have anything to do with this as well.
In the fringes of my mind I want to say I recall reading that it increased loot quality in Elona or E+. I'm certain that's not the case in Elin. It would make sense though, a seasoned adventurer would have a more discerning eye and all that.
More fame = better rewards for quests and nefias, but tougher monsters in quests and higher level nefias on average. And also more taxes.
You're suposed to regulary get rewards if you are in the top ranking, although I am not there yet.