Well, we know why Gajeel wasn't chosen (Erza with the cockblock)...
Mira probably vouched for Fried...Natsu and Gray are shoo-ins, so is Juvia as she was S-class in Phantom. 'Mest' ruined the final spot...so, with the excpetion of Happy and Wendy, and technically Loki as well, the partners of the S-class exam could have also been chosen to take it as well.
...so unless Master is 'rewarding' her for her efforts in taking down the runes during the entire Laxus fiasco, I don't see how Levy should even be there either...
And honestly, Gajeel was getting nerfed as of late too. He should be nearly on par with Natsu and that shouldn't have changed so much that he gets taken out by footsoldiers in the first skirmish and you have Natsu beating Zancrow, fighting Ultear, fighting Kain, getting smashed by Bluenote, and still able to even attempt to take down Hades... ...priorities, Mashima, priorities...