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.
"During times of universal deceit telling the truth is a revolutionary act."