I think auto-approving characters would be good as it'd get some people immediately playing, I know when I submitted my first character I was shaking in my boots to play, sadly we are in an era where people lose interest very fast due to how immediate everything can be, so needing approval does take away the eyes of short-attention-span people (nothing wrong with short attention span, but that is how things be right now)
There are a couple things that are redundant, for exampel:
No matter if you take Artwork or Writing, both will eventually lead you to the same description Window, this could be simplified by having a "write a profile" window with optional picture upload, for example.
A profile could be simple for character creation, just something quick and easy and maybe with word filters in case people decide to get rowdy and use Not Good language if you catch my drift.
Another suggestion of mine is that the process of character approval could be done with the first rank up (maybe rank up to 1?), have a little tutorial with the character development and let people explore the site as they go. Also allowing players to explore the whole mechanics is good, I remember talking with my friend that it was a little frustrating that we needed to be Rank 2 to join battles, when we already knew what we were doing, especially because finishing each apprentice step took a couple days each time because of the approval process (i LOVE the approval process, but of course, if you can't rank up, the boss is half health and you want to fight it, and have to wait up to five days, it does become a bit frustrating being unable to participate)
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I hope I was able to bring my thoughts out properly, I am a little bad at writing any sort of criticism, the only things I can see could go wrong if there's auto-approval is that people could make a bunch of characters to get the gold + battle tokens from it as an exploit, my suggestion to deal with that would be to give the tokens with the first rank up after character development, and perhaps having a limit and not letting people make a new character until they've had their first rank up, but not sure... There is a lot that would have to be balanced for sure.
TLDR; Perhaps the character creation is a little too hand-holdy, making it have too many steps, plus the waiting of approval could make people leave and forget, I do believe automating approval could also ease some mod stress.