Right you are.
Either descrease the HP or increase the XP required to level up.

I tend to think that it couldn't for there to be some limit for the XP levels of ships, regardless of difficulty level.

I think a cap of level 10 would be better, with much harder requirements to level up. Even though I try to avoid things that level my ships up too much, just using ships to take out fleets make them very powerful as long as you upgrade the ships regularly to counter the enemy ship constructions.

Alternatively XP would give bonuses in other things than HP, such as increased range/speed/attack/defense. But even then a cap is probably a good idea.

IMO, crew experience shouldn't translate into stronger ships. It should translate into bonuses to attack and defense. I'm not saying a 1 laser / 1 shield ship should gain XP until it becomes a 5/5, or anything. But as the ship gains experience, give it a small bonus to the "dice roll" during combat. It would mean the ship is better at hitting its target or better at evading damage (just like a skilled crew would provide).

I like it the way it is. They captured all of that better attack, better dodge, etc stuff in upping the HP, you up the HP and the ship will have a better chance of winning, period.

Don't mess with something that isn't broken. If your fleets continue to survive battles that is a good thing that they become increasingly difficult, and finally nearly impossible to be defeated. They are the elite, and they shouldn't fall.

This is ofcourse, just my oppinion, and I am certain that all of your points are equally as valid. If you really want to tone down the experience advantage, you can always break up that fleet and put the individual ships in seperate fleets with lower level ships. This should keep them vunerable. Or better yet, you can put them in orbit and use fresh recruits.

Also, dude, stop playing on beginner. 1st game is beginner. By the 4th you should be at least on tough

Or they could add some more areas for it to give bonuses to - examples I can think of are:

1) Capture enemy ship

2) Surprise rating (i.e. if you go up against a real monster of a ship - which is the sort if thing I like to build!! - you can have a surprise attack on them)

3) Boarding Skill - Attack and Defence -this would tie in with no.1

4) Logistics decrease

It's much more balanced in the 1.1 beta. HPs seem to increase at roughly 1/3 the rate. You can still get significant numbers of hitpoints, but not to the point you can overpower the opposition sending your ridiculously experienced small ships at their dreadnoughts. Well, maybe with METICULOUS planning...get those huge hulls early and carefully manage their development...but frankly if you go to that much trouble you deserve the reward.