Probably in the beginning you all will mostly be fighting NPCs and other things until the numbers thin out. So lets say during a stage of the exam I'll come up some scenarios and challenges and randomly pick which characters runs into them. Some would be easier than others. There will be NPCs who are stronger than any of the player characters running around so in those situations you'd need to run, come up with something extremely clever, or maybe need to work together with other players. Since you'd never win in a normal 1v1 fight against them. Also the player will have a fair bit of freedom to create their own challenges too if they want, like wanting your character to run into a a wild beast they have to fight or falling into some hazard or trap and try to get out of it. They can post how they want with that and I might add a bit here or there to make it more challenging or easier if I see a need.
With PvP right now I am thinking that if the two players can come up with a scenario and outcome to the fight on their own then I'll let them fight and post how they want within reason, but if they want to fight but can't decide on an outcome then I'd step in and roll some dice to help decide it. So I'd roll to see who gets the first attack, then if they want to do a big attack I'd roll to see if the attack did a lot of damage or ended up missing, and it would go back and forth until someone lands 5 big hits. So something like that. PvP isn't as important early on so we can toy around and develop it when the need for it arises while the RP is going.