How about dealing away with the whole memorizing bit and just change some basic spell stats as the magic user goes up in levels.
Example: A first level magic missile would take half an hour to cast, do 1 hit point damage and make the caster 20% tired after using it. A 20th level magic missile would be cast instantly, do 20 hit points damage and not tire the caster at all after using it.
Disclaimer: Do not take these numbers seriously, and feel free to add other ways to nerf spells for balancing purposes.
P.S.: I'd like to know what the views of Obsidian's designers are on this subject.