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Grim Dawn comes to mind, where the core of its story takes place along the coast (I think it might be around a lake, but don't quote me on that). One expansion takes you somewhere else, but that's mostly it. Although the areas are very large, the explorable world as a whole is quite linear, so not at all as interconnected and interesting as XN.
I never played much of it, but I hear Vagrant Story might have the kind of world presentation you're looking for. It's not as sprawling as Squaresoft JRPGs tend to be, which is one of the many aspects that set it apart, so it isn't a necessarily long game. Besides, Ivalice is one of the richest game worlds out there, and it seems VS's version is quite detailed.
Ys: The Oath in Felghana
And if you can emulate PS games
Vagrant Story
Its a western game though so it won't have that "eastern flavour" if you know what i mean. There aren't many single-player isometric camera western styled ARPG made in Japan like Xanadu Next.
You can also play Final Fantasy XII in isometric camera angle if you tilt your camera stick all the way down. I don't know why but Xanadu Next gave me strong FFXII vibes while i was playing it (maybe its the blond kid with a sword, sister-like support, medieval kingdom affairs, beautifully designed sewer systems...) and thats before FFXII was even released.
https://store.steampowered.com/app/1718570/ASTLIBRA_Revision/
Feels like this is a direct precursor to Astlibra, in more ways than one.
-Hub town
-Almost exactly the same gear skill system (only weapons in Xanadu, all gear in Astlibra)
-Silent blond protagonist with troubled past and ability to whack gods with a stick to death
-ALL equipment is honestly physically shown on character's model
-Smash enemy get coin super satisfying simple combat with nuance and positioning being key factors
-Every [new] chest feels like a reward, and not nothing burger like in most games
-Harem
-Multi-layered progression
-Similar aesthetic style (except portraits)
Basically Astlibra is Xanadu Next 2: side-scrolling boogaloo
Except Astlibra is 70 hours rather than 20.
Shining force Neo
https://www.youtube.com/watch?v=IC1dslAy0UY
And also Shining force Exa plays the same .You will need a ps2 emulator to play both of these.
Aside from that there is the Ys series as others have mentioned
For other games that are not exactly Arpg but are ''slice like'' as you mentioned, there is Alundra, and Ico, both Japnese games with small worlds that have interconnected areas that you unlock bit by bit . These are more adventure style games than Diablo though.
Xanadu Next is a pretty unique game tho and its hard to scratch the itch exactly