I'll try my hand at this, as someone else who played the game at launch and had a lot of fun.
The game was, and is, fun. You're not incorrect there. Back then (chapter 1 and, later, 2) you'll get through 30 or 40 of the 50 available levels without having to use the arcane transmuter. Once you've reached the end-game dungeons (Treasure Trove being one of the first in this case) you had to start what's now called "statting." Basically, its working the AT to get as many good stats on an item as possible. This required Purified stones if you wanted 6 good stats (otherwise you'll maybe have just 4) and a lot of patience. Once you got beyond that, you were looking to "Tier" your weapon to get as much juice out of it as you could.
Both Tiering and Statting need the AT. Combining runes to put into said gear after you've made it also needed the AT. A free-to-play player, not using the AH to buy Diamonds, was looking at 10 AT charges every 3 days (I think). A person with money to burn can just buy charges as needed. They can also buy purified stones, better upgrading items, and several items that made life easier. So back then the game was P2W, we just didn't know it until you hit max level. Doing all of these things was required for end game progression.
Four years later I don't think anything has changed in that regard. Maybe we can find raw materials higher than Tier 3/4 (?) which makes creating higher tier stones a bit easier, but I'm sure T10 is the new benchmark instead of T7/8.
As for the grind, they've since added the Coast of Opportunity, where you can shoot up in levels apparently if you've got the gear. I haven't gone myself, as I only rejoined a few days ago, but a few people here believe that removes most of the grind from the game. Hope that helps.