When you press the Fight button, you enter the matchmaking screen. The game looks for another player with a similar Skill Rank and matches you for a fight. (How does the Skill Rank work?)
The level of your hero and your spells is not relevant for the matching. In case your level increases and you get stronger, you will also have an easier time to beat opponents and raise your Skill Rank.
That results in the matchmaking looking for on overall 50% win chance for every hero of a player. Players with high skill might be matched against players with higher power. (Why do I get insanely powerful opponents?)
Players with high skills earn a lot of additional rewards and progress much faster through the game.