Lol I'm level 92 and I'm barely above 20,000.
Level is a very rough measure of experience, though remember it takes into account your total score, so that includes every time you've retried the same map over and over again. Like me.
Level and rank shouldn't be use explicitly to determine a player's skill level. They only serve to be rough estimates of where you are compared to the other players of osu, unless you're top 10 or something.
By the way, the only way to get better is to keep playing. Follow the advice of the other people in this thread and keep playing tougher songs, and you'll find your skill steadily increasing over time.
As a fun experiment, find a map that you can't pass right now or have a very difficult time passing. Leave it alone for a few months. Then come back and you'll find it's much easier! If you need proof that you're improving, that's it right there.