I'm sure "New Los Angeles" sounds very cool to a Japanese person but it sounds very funny to me. Explore a future world of urban sprawl at 2 mph on a backed up freeway! But then as a kid I thought a location like Neo Tokyo was super cool, but Tokyo itself is some nifty foreign land to me, probably in the same way Los Angeles would be to a Japanese person.
Exploration was my favourite part of Xenoblade. I'd look at the map and notice "hey, I haven't been there yet!" and then I'd head off to see what's there. On one hand it would be nice to explore without enemies kicking my ass the whole time. On the other hand, not having the obstacle would probably make it too easy for me to explore real quickly and then have to slog through the less interesting elements to get to the next area to explore. The battles force me to balance exploration and fighting. Without the carrot of clearing out the enemies in an area so I can explore it fully I would probably lack the motivation to clear out the enemies until I had to, forcing choke points of the more tedious parts of the game.
But it's an option so I could always just not play it that way. I like options and I'm fine with accommodating casual play with them. It's only when they dumb the game down for everybody that I get upset.
2015 was my obvious assumption for the release date because, what, it's going to be strung on us within the next month to make 2014? How would that have been feasible?