After that it actually showed him at level 70 when he swapped his weapon to fight the boss under the tree... very briefly... for like 0.5 seconds LOL

First of all, regarding his level changes. He meets them at level 40, however, in the light novel it was stated that he sneaks out every night to the higher floors to train all by himself. Thus, showing how he's already level 48 the next time we saw his level. However, this side story was portrayed as Kirito's flashback during Christmas so the death of the guild members already happened a few months ago. That's why he was already level 70 during Christmas when he went to challenge Santa Claus.
Also, some details were left out, so to anyone who's interested, read on.
There was a reason why Kirito blamed himself so much for Sachi's and everyone's death was because, not as a direct quote, but something along the lines:
Sword Art Online was different from other MMO's. Level, equipment and stats were not important in SAO because it turned into a death game. The most important was "information". And Kirito had that "information". However, he hid it from everyone else, his level and his knowledge of the game. In the light novel, when they bothered to open the chest, Kirito had told them not to and only gave them the reason "It looked suspicious". However, he knew that it was a trap because he had a detection skill but couldn't tell them due to him hiding his level. He blamed himself of their deaths because even though, they had leveled up and gotten stronger, he did not reinforce their knowledge further on SOA.
This relates to the guild leader's hatred to Kirito, who was a "Beater". The anime doesn't really explain much about Beaters. By the definition of Beaters, they are people from the beta test, but also people with "information" but selfishly hid them for themselves. And it was because of this act that Kirito thought that it was his fault everyone was killed. That was why the guild leader stated that,"Kirito didn't have the right to join them".
Also, I was happy that they included the last message from Sachi in this episode because this was a very important bit. Regarding how Kirito received the message, Kirito had set up a combined inventory with Sachi before she died. This was a very important factor because it was close to "marriage" in SOA. However, by marriage, everything is combined and also allows couples to view every window of each other. Although Kirito and Sachi wasn't "married", this combined inventory which was created under the excuse of "sharing potions would be more convenient", showed how close Sachi and Kirito were. Sachi's death cause Kirito to be devastated even though he kept promising her that he'll protect her. And the reason why Kirito was able to get that message was because Kirito didn't delete the combined inventory even months after their death. He couldn't. So he left it there, including any items that was in it. Sachi's message was a timed item that would appear on Christmas inside that combined inventory. And it was this message that made Kirito be able to recover his motivation to live and fight on.