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Why? What is the point? I cannot see that having such an OP character serves any valid or useful purpose. Moreover, Cat has mentioned in some posts that some Skills/Abilities wrap around after they reach a certain level which means they effectively start over at zero.
As for the level cap of 100, I do not believe that it a hard-coded thing. I remember it coming up during a discussion of what level a then-under-development expansion should be set to. Cat mentioned that Elendil had stated that the game engine had never been tested with character levels above 100, so there is no knowing what will happen. (The game might work normally, it might behave erraticly, or it might crash and burn spectacularly.)
The enemies are programmed differently. Elendil said the game engine never tested level 100 characters and he warned me to warn you not to take your stats too high or they will wrap around to 0. That's all I can say but players here who have gone really high on certain stats found they couldn't do damage anymore or something similar.