Agreed..True. The idea for example that Picard would still be "Lieutenant Junior Grade", at past sixty is just absurd! It would mean that everyone in Starfleet with a rank above Lieutenant would be a hero that risked their lives to save a group of people at one point or another... That's just not possible. Even in wartime, people like that are the exception, not the rule!!!
Picard would still have all the abilities that made him a great captain and leader.
Unless:
He was known as a coward and Starfleet treated him treated him that way forever not giving him opportunities to shine.
He was so traumatised by the incident that he retreated into himself and didn't show any leadership qualities. But even in a science lab you can lead projects. Inspire your work colleagues.