The other is to keep numbers small, make health 10 at first lvl, make bosses have 50 health to start with, increase slowly by increments of 2-6 for every level instead of multiplicatively, make characters hp raise by 1 per lvl
The power trip will be lower but balance will be way better, bug fables did a great work with this, you start with 9/10 hp and by the endgame you have 16 hp or so, most stuff are side grades
The only thing about having really low numbers, though, is that you have less variance to work with. Old DOS RPGs had this problem, and it's where the "deadly sewer rat" meme comes into play. Say you're a guy who only has 5HP. Well, the smallest hit possible is 1HP until you start going into fractions of HP which is just messy for UIs. This means that a sewer rat can kill you in 5 hits and if you run into two of them, you're going to take a minimum of 2-3 damage which leaves you near death so you have to heal up or camp after fighting two rats.
That, and upgrades and progression needs to be large enough to make the player feel rewarded by their actions. If you go through a game and your characters don't really look or feel all that much more powerful than they did at the start, then what were you doing all game? Remember what I said about FFXI and side-grades? People get bored if they don't notice much reward for their time spent.
There needs to be a balance between these two things, sensible numbers, but yet an actual progression curve where your characters feel more powerful as you go. This doesn't have to be straight up numbers, but the player must feel the difference in strength in their character. Vanilla Terraria does a decent job at this, and I can name several other older games that use smaller (but not THAT small) numbers.
For example, Might and Magic 6 through 8 (not to be confused with Heroes of). You start the game with, IIRC, like 20HP or so. The most tanky of knights will likely end the game with about 700. You start out doing 2-9 damage with a sword, and at the end of the game, you can see melee hits upwards of 90-100. Not a huge progression of numbers, however there's lots of other factors that go into how powerful your characters feel and a lot of it is "under the hood" so to speak -- you can take more hits without dying, and you have access to better spells, and can cast more spells before running out of SP, and spells you learned earlier in the game are more effective as you increase your skills and train in them. You start off being severely hurt by goblins and after a couple levels, you are mowing them down with ease even though your damage output didn't change
that much. This continues into the game, perhaps the first time you enter Bootleg Bay, those groups of Cannibals really give you a run for your money, so you decide to go back to an earlier dungeon and see if you can't complete a different quest and gain a levelup or 2 and then yo ucome back to Bootleg Bay and now you're mowing groups of them down. You might not understand why exactly suddenly your characters feel so much more powerful but they just
do and it feels awesome even if the numbers didn't shoot up much (one of the reasons I praise Might and Magic's design, the games are addictively fun once you get the hang of them).
EDIT: Also, too much progression not only goes into silly number syndrome, but also... let's say you start the game with 20 or 50 or even 100HP and you take 2 hits to kill the sewer rats. Then you gain a couple levelups and you can kill them in one hit and the damage they do to you isn't even a tenth of a % of your health. That's at level 3. At level 5, you still one-shot them (and will for the rest of the game) and they'll do even less of your HP in damage, but their damage was so low before that it doesn't matter. With an explosive progression system, you trivialize early content way too fast, for no real gain. Earlier parts of the game already get ludicrously easy even at low levels and as you get high levels, the numbers just get silly. One thing that many MMOs do that really gives you more control over difficulty, is difficulty by Level Scaling. What I mean by that, is compare the enemy's level against yours, and apply multipliers based upon that. If you attack something that is less than your level, you deal more damage and take less damage. If you attack something higher level than you, you find it harder to deal damage and they hit you harder. But that only works for games that use Level systems, and it wouldn't work for something like Terraria, admittedly.
