Boss level cap? or area level capFollow

The only time your gear will scale down is when you mentor. It will adjust to whatever level you have set. Remember when you mentor, you will be unable to use higher level spells. i.e. If you are level 30 and you mentor a level 20 character, you will not be able to use spell levels 21-30 until you cancel mentoring.

When you fight low level mobs that are grey, the chest loot drops are turned off. So you will not be able to farm a low level boss to get it's special drops.

To get around that, group with a lower level character that will make the mob turn green, that way the chest drops are turned back on. The group average level determines the /con of a mob.