I put more time into the demo, max level is indeed 20, I got Impa to max level first. Zelda and Link are about 14-15 respectively, been grinding away for material and rupees. Been trying to figure out the weapon fusion system more and I think I have a much better understanding of it.
Essentially, each weapon (in the demo at least) can be maxed out to 20, basically just feed your other weapons to your equipped one and it will level up, the interesting thing is the abilities attached to the weapons. Every 5 levels nets you the ability of the FIRST weapon you choose to fuse up to a total of only 3 abilities (so levels 11-20 don't get you a fourth ability). For example; if I have a sword with +3% damage to basic attacks and want in addition +3% attack speed, I will have to choose the +3% attack speed weapon to fuse first, than whatever weapons after that that equals too or exceeds level 5. It's important to note, that if your weapon does not reach level 5, it will just use it for experience, so save the weapons you want the abilities for, and make sure you level it up to level 5 or 10, this is where the 150% fuse experience comes in handy, it can level up your weapons incredibly fast so you don't have to fuse 5 different weapons to level it up.
Edit: Correction on the levels needed for your ability, only levels 5 and 10 are needed, the other levels are just for leveling up.