Not all pvp is bad, I live for the rush I get when engaged in combat with something that actually has a brain and can do more than stand in front of me or run away when near death (boring)
I have seen factions being used on shards that dont like pvp with rules that forbid camping some one and griefing them aka rez killing them over and over just to be a pain to them.. rules like that cut down the anger people get when they are killed.
I am of the personal belief that if you hunt in felucca it should be more dangerous not just with stronger monsters but with the chance that some player might come and kill you and take your ore or your wood and so on.
there could be rules on what can be looted too and with insurance... what is the problem with pvp? its not like you dont have a choice on what you want to protect and what you dont. a player can insure anything that they would not want looted when they die.
if you dont want open pvp why not think about just faction pvp? where if a person does not mind the danger of apparent pvp they would be in a faction and have the chance at controling a town ?
and since I have noticed that your felucca towns are insane ( yeah I died to a butcher in the mage shop

you have a mayor
why not give a chance to factions to influence the town as well?
a good balance of good vs evil
just my thoughts because I loved how realistic it is when a faction could control a town and had to guard its territory from rival factions... in the real world they would be called Mob or if they are less refined a simple gang would suffice
to sum it all up. I miss the excitement of the rp of a faction and the chance to influence the town the idea of handing power to change things to ordinary players should they dare to reach for it