He's a first-round pick for a couple reasons.
First, 10-12 teams need a QB. They don't all need one exactly opening day next fall, but they all need a guy at least on deck developing to take over and potentially be the franchise within a couple years.
Second, prototype. The league is a prototype league with very few exceptions.
"There's lots of big guys with big arms who don't pan out"
Yeah, that can be said for the NFL. Most guys don't make it. However, you have to error on the side of who does make it.
Even though most QBs in a draft won't amount to much more than backups if they're lucky...most of the QBs who do make it, become franchise stabilizers, advance in playoffs, and play in super bowls...there's a pretty clear type...Will Levis fits that perfectly.
Ideally, he'd go somewhere he is able to develop for a season or two which means he slips a bit but sometimes that's a good thing for a QB.