GTA Online has a great leveling system. You can easily compete with a person at rank 100, but if you are equally skilled as them, they'll have a slight advantage. It's enough to make you want to level up yourself, but not enough to turn a decent player into a great player.
The primary advantage to being higher level is being able to earn access to harder and more profitable jobs. You also earn access to more cars, car mods, weapons, clothes, etc. The only time you'll have a real disadvantage at lower levels is if you are doing a race and some dude has a fully modded car. You'll have access to the same cars but not modded. But if you're good it won't matter.