
The current ways to level heavily favour online mode, however those without decent internet connection (such as myself) tend to find leveling a bit more time consuming.
Simply put, after completing a set in Arcade mode, you will get bonus Character XP based on difficulty.
Easy - 100 XP (up to 150XP based on Medal)
Medium - 250 XP (up to 350XP based on Medal)
Hard - 500 XP (Up to 750XP based on Medal)
To incentivize players to play well, you could tack on extra xp based on their grading. for example, getting a gold medal on Hard might give an extra 200 Xp, but getting one on Easy would only give an extra 40.