Combat level estimates your fighting strength, taking combat skills and character growth into account. Compare it with a monster’s level, then also consider equipment, health and spells. It is guidance, not a guaranteed outcome.
Character XP comes from defeating creatures. The progress bar shows progress toward the next character level. Each individual skill reaches 99; skills unlock resources, recipes, equipment and bonuses. Total level adds skill levels together and is not a combat rating.
As you outgrow a creature, its kill XP gradually falls to a minimum of 5%. Combat training also considers the skill you are practising, so learning beginner Archery can still be worthwhile on small creatures even if your Melee is high. Examine a monster to see your current kill and training XP percentages. Attack spells reward actual damage, not excess damage after a creature has run out of health. Loot and journal kills are unaffected.