Since the enemies scale with you in increments of 5 you can completely avoid level scaling by stopping at lv 4, 9, 14, 19, etc, but what is the best lv to stop at? I mean which lv has the best mix of stats, items, and monsters?

Also as a side-note are there any quests or situations that will require you to sleep? Like say going to jail?

Now as for Aylied ruins; it's been a while since I played but I remember two really weird ones whose names I can't remember.

One is in the ass-end of nowhere in eastern Cyrodrill, south of the town that sells black horses, and east of the town where you complete the final Dark Brotherhood quest. There is this door which you see nowhere else in the game that I COULD. NOT. OPEN! It's frustrates me to this day how do I open it?!

Second is the ruin like right beside the road to Kvatch from the Imperial City. There was also a babarian camp nearby if I remember correctly. Inside was a lich along with a really, really, really big Varla stone which was stuck in my inventory for the rest of the game. Exactly where do I find the quest concerning that accursed rock?

All enemies enter the game by 23 and all items reach their max by the low 30's. Any leveling past that point is just giving HP to the enemy.

Several quests require you to go to sleep in order to complete.

Anvil Recommendation-
You need to sleep at Brina Cross Inn in order to advance this quest.
A Knife in the Dark-
You will not receive your first visit from the Dark Brotherhood until you've slept after committing a murder. You need to sleep a second time to finish the quest. It is possible to use one of the quests where you can sleep without triggering a level-up to enter the Dark Brotherhood (Lucien Lachance will even visit you in Henantier's Dreamworld).
An Unexpected Voyage-
Sleeping aboard The Bloated Float Inn will activate this quest. You also need to sleep a second time to finish the quest.

The first ayleid ruin sounds like Vahtacen.

I did not know about this 'increment of 5 thing', how exactly does it work? For instance, I'd be tempted to answer level 26 is the 'best' coz I wanna be able to face ALL possible dangers, and the Lich is a lvl 26 foe. Now if this means that you can find liches at lvl 21, then I'd say lvl 21.

Personally, I have little against the levelling. Unless you're roleplaying you can just adjust the difficulty slider if it gets too rough. It's down to the individual persons to decide whether or not they want to do such a thing, though.

I would say you should stop levelling at about 34. As winter wolf said, all items reach their max by the low 30's.

I always 'cap' the maximum level of my characters by selecting several major skills to not use.

Here are some of the data points that I consider in choosing a top level:

17: Top alchemy gear and sigils
19: Top leveled Hatred's Soul
20: Daedric weapons, Daedric/Glass armor, all quests, almost all monsters
22: Xivilai
23: Perfect amber/madness (SI), gloom wraiths
25: Lots of top-leveled quest rewards.
26: Liches
30: Everything, including all remaining top-leveled quest rewards.

My current character does not care about leveled loot or amber/madness, so she is capped at level 20.

Enemies does not level each 5 level think it's more a chance thing as then you level up you have greater chance of getting higher level enemies, yes many of the leveled lists has increment of 4 or 5 but the daedrea, undead and animals are not in sync.

One benefit of stopping at level 20 as Acadian does is that you have a chance of getting top level equipment but equipment makes more sense than at level 30, bosses have far better gear than average bandits.

Past level 30 the only effect is that you and enemies get more health, some enemies also do more damage. You however just gain more health as you primary combat skill is maxed out long time ago.

That is http://www.uesp.net/wiki/Oblivion:Miscarcand_%28place%29, and the rock is the Great Welkynd Stone that is part of the associated http://www.uesp.net/wiki/Oblivion:Miscarcand_%28quest%29.