It's easy to fix the griefing aspect. It always boggles my mind that I've seen so few games use it. Just make it a strong disincentive to not grief. How? Glad you asked. Simply flag the griefer with a series of flags.
1 kill = Wanted - means anyone can attack him without incurring a Wanted flag. If he responds his flag escalates.
2 kills - Outlaw - same as wanted but now the game spawns mobs to actively hunt him
3 kills Villain - same as before but now the game spawns boss mobs to hunt him and advertises his position to other people. Perhaps even places a small bounty on his head to reward those who hunt him down.
Whilst it won't stop it, it'll sure put a major dent in it and make legit players not spam to avoid friendly fire too. The flags would also be on a timer for de-escalation - if the griefer somehow survives - but the timer only winds down if he's actively out and participating/hunting mobs in the game world. A MUD I used to play on long ago used to this great effect.
"We choose the right to be who we are. We know the difference between the reality of freedom and the illusion of freedom."