UOX3.org

I wanted to know about this setting as there is no real guide on uox3.ini

SKILLLEVEL=5 <-- what does this do?

You've missed a page, then

https://www.uox3.org/docs/server-settings.html

Probably not up to date with the all the latest settings, but about SKILLLEVEL it says:

Global difficulty level for crafting items. 1=Easiest, 5=Default, 10=Difficult.

I believe it's only used when the RANKSYSTEM is enabled (if 1, items created by players will have variable quality).