I have heard from other people that they think there will be another story arc in the game. They are already level 100, so my question is are people going to be able to go past level 100?
Yes. KI has already said the coming part 2 of Khrysalis will be the end of the 2nd arc/chapter and like all good stories, Wizard101 has more than 2 chapters. There will be many more to come according to Professor Greyrose.
Yes, it has been confirmed by KingsIsle that they have plans for more worlds in the future. The new villain seems to be Old Cob, whom you meet towards the end of Khrysalis part 2. This would mean the level cap will more than likely be raised above 100 in one of the coming worlds. Hope this helps!
There will be more worlds and levels after Level 100. And just like Aerier said the new villain seems to be Old Cob considering that he mentioned 5 worlds in the final cutscene of Khrysalis 3 of which were actual world names and the other 2 remain a mystery. Hopefully it won't take almost 2 years for Kingsisle to make the third story arc just like they did with the Dragonspyre which came out in early 2009 and Celestia which came out October 2010. Megan Frostflame Level 95