Skills do matter yes, they are not NEEDED but maxed out they help a lot.

When you die you lose 5% of EVERY skill you have obtained. So if you were at 100 you'd go down to 95 if you were at 50 you'd go down to 48.5 etc.. when you die you get a buff that dissalows skill drain on death for a certain period of time to allow you to hopefully recover your corpse.