Rudy definitely spent a lot of time in Akiba. He would have heard the real players talk about all kinds of incomprehensible things. Being a good actor, he would copy the mannerism, thinking it would take him closer to being an adventurer, despite only had a vague idea of what's going on. Thus, he would have spoken about levels and such even if they were only his own estimates.

I haven't played any MMORPGs so I wouldn't really know, but wouldn't they also have NPCs giving quests where you have to be of a certain level to qualify? Maybe there would also be merchants whose wares would partially depend on the players' level. If that was the case in Elder Tales, then great many NPCs would know of levels. It would be as natural to them as talking about age in years.