' will grow their character’s abilities as they master powerful spells, hone combat skills and select companions to help them face off against deadly enemies,' Avalanche say.
They've mentioned that you will be able to choose your student's school house at the beginning of the game.
Avalanche is calling Hogwarts Legacy an 'immersive, open-world action RPG.' The immersive part may or may not mean a whole lot, but it sounds like you may be able to freely explore Hogwarts and other familiar locations while leveling and customizing your student.