Here is how to prevent item hoarding and clutter. Simpy let players trade excess gear for exp crystals. We all want to skip past lives. And hoard ger for it.
Why not give 100 exp crystals for items 1-4 5-9 500 and so on for named items.
Easy easy solution Grouping at higher levels is much easier thus players will need less garbage loot to make their level-up process smoother!
Also make exp crystals additive, 500+400=900 instead of keeping separate crystals