You sneaky squirrel, you! You stole some words out of my brain.
"1. You probably want a reason for there to be monster everywhere which the player can and should kill."
What if the MMO was designed to let the players advance and progress through activities other than killing mobs in this world?
I'm not a very big fan of the current MMO design since it has a forced "monsters everywhere" philosophy, It would be much more fun to have monsters be rarer and more scary (OMG itz a monster, run! *dies*)
Something really effective in MMO world building is giving the players an experience that can link them to this "supposedly living" world (Random events, constantly updated content, varying triggered events and very well hidden valuables).
Hmm, I guess this doesn't have much to do with writing, just throwing the idea out in the open ;p.
I personally feel that another important thing is visual identification with your character. I haven't played too many modern MMOs, but the ones that I have played (KalOnline, Silkroad Online, WoW) have failed largely in this respect, while older and generally less respected ones like Tibia and RuneScape do a fairly good job. Obviously I can't give my character my face or physique in these two games, but I can change his hairstyle and hair color (and in RS, skin tone) until it looks similar to mine -- or even just like mine. Quest/Mission-oriented Non-MMOs like Oblivion and Fallout 3/New Vegas excel here too, and while it might be taken a bit for granted I think that people respond to that whether they realize it or not.
The next important thing is immersion. You need to feel you're really a part of this fantasy world, not some intruder. NPC interaction is key here. Some other things, in addition to what you said about logical placement of monsters, is that monster loot and strength are realistic. Most MMOs fail horribly in those respects, but I don't think that players really respond to those things nearly as much as to lame NPCs. I would also add that music (if applicable) and visuals assist here, and depending on the theme used may actually have a big impact.
When I play an MMO, I want to explore. There needs to be multiple paths to a single point, maze-like dungeons I must traverse, and of course a reasonable number of monsters to pwn with my sword. Tibia was actually the greatest MMO I've played in this respect. If I get lost every now and then, you're probably doing it right.
Another important thing is the gameplay itself. The less interactive and more autonomous the gameplay, the less I feel involved. I've heard good things about WoW on boss enemies requiring groups to take down, but the general solo gameplay held my interest for so short a time that I never got to the point in the game where I could take part in these. Tibia and RuneScape fail horribly here, and so did KalOnline and Silkroad. If I've got to constantly make decisions about what hotkey I should use next even for simpler monsters, you're probably doing it right here. That's why everyone loves the boss monsters, and why people are willing to dish out hundreds or even thousands of dollars for higher-level characters: this is content you only get at those higher levels.
Puzzles. This is something very common in single-player games, but very rare in MMOs. Interesting puzzles can help with immersion, make gameplay less dry, and are not hard to implement in a client->server setting (they'd probably be less network intensive than combat).
The community is the most important thing. Sometimes I like to treat whatever MMO I'm playing like an open chatroom with people from all walks of life all around the world. Tibia once excelled here (it's chat console is a pretty big part of the game), but nowadays it's populated by bots and people with little or no English skills, so I don't really get it from there. I didn't get this from WoW, Silkroad, or KalOnline either. I did get this from RuneScape quite a bit and probably still would, but the sensitivity of the censor made communication a bit difficult sometimes. Which brings me to my next point...
The internet is for porn, netflix, harassing the mentally weak/ill, erection pills, committing or becoming a victim of identity theft, watching horrible ideas go horribly right on youtube, and sometimes some hardcore gaming. Aside for maybe netflix, none of those are very good things for children. Even if pedobear is playing your MMO to pick up "women", they've probably seen much worse things than the last three letters of class, which you will probably assume is my attempt at slipping a cussword past your daft censoring system. There's no need for it. Don't do it. It's annoying and disrupts clean, pleasant conversation just as often as it actually does its job, which as previously noted, is pointless.