Is that the only thing that prevents bad behavior for high rep users? You have to 'report' them on meta?
There's little evidence to suggest that more than that is required. SO works because there's a strong correlation between reputation and a history of positive behavior. For moderators, the bar is even higher -- they go through an election process (we just finished one) during which anyone in the community can ask questions about their history, values, etc. I suppose it's possible that a moderator or high-rep user could snap for some reason and suddenly change their behavior, but that doesn't seem to happen. If it did, you can bet others would notice quickly and deal with the situation.
What if you try to stop them but they 'punish' you, and you can't do
anything about it because you are low rep?
I think you might have some misconceptions about exactly what privileges are afforded to high-rep users. As you gain reputation on the site, you're able to do things like vote up or down, review edits, vote to close, and vote to delete closed questions. But closing or deleting a question requires agreement from several users (mods can do it alone), and close and delete votes are public.
Someone may edit questions so they favor his own answer, or disfavor
yours because your he does not like your answer.
You can always roll back edits that you feel change the meaning of your question. Be careful about that, though -- most edits are genuine attempts to improve your question. Its far easier to write a good answer than to write an answer to some other question and then edit the question to fit the answer. I don't think I've ever seen a case of the behavior you describe.
Delete votes on questions (I don't even know what this means) for subjective reasons.
High-rep users can vote to delete closed questions, but we can't delete votes. Voting in any respect for personal reasons is poor form, and I think most people respect that. (Also, there's a process for detecting and reversing questionable voting behavior.) It happened just the other day that a user downvoted vindictively and even admitted such, and the community jumped on them pretty quickly. I'd link to the question, but it's been deleted.
Dismiss flags that are valid.
High-rep users don't get to pick and choose which flagged posts to review. (I'd guess that moderators do.) Flagged posts go into a queue, and when you review the system presents them to you one at a time in no particular order that I'm aware of. So yes, someone could decide to start voting to dismiss flags that are valid, but in order to dismiss the flags on a specific question they'd have to start reviewing whatever is in the queue and just get lucky enough to happen on that question. Most actions require agreement from several reviewers, so one person can't single-handedly dismiss a flag unless they're a moderator.
There's a lot of transparency built into the StackExchange system, but the thing that really makes it work is trust. You gain privileges by showing that you're trustworthy, and you can lose them if you violate that trust.
This post was apparently the reason anybody found out about a privilege misuse.
It's worth pointing out that the complaint you're referring to was probably written with tongue placed firmly in cheek, as were the answers. It complains about an edit made by Joel Spolsky, a founder and CEO of Stack Exchange. The complaint was made four years after the edit in question, by which time the platform had evolved quite a bit. That doesn't diminish the question here, but it's not a particularly good example of abuse of privilege.