A "cell" is an area in the game usually seperated by a loading screen, with the exception of some exterior cells. I don't think entering the hold would do anything since if it works anything like oblivion the world itself is made of multiple cells; if not then Whiterun -and certainly Jorvasskr- are definitely different cells and so Farkas wouldn't be loaded unless you entered a cell he was in.
The problem is, when you enter a cell, data from all the adjacent cells is "pre-loaded" into memory so the game can quickly fetch it and load the adjacent cell when you enter it. That
may be enough to set an NPC's initial level; which would mean that entering Whiterun would set character levels in Jorrvaskr as well (including Farkas'), since it's adjacent to Whiterun. And if he happens to be outside, behind Jorrvaskr when you enter Whiterun, he would certainly be loaded.
I am not certain about this, and if I'm wrong please do correct me.
The other thing with Farkas is that his coding is all messed up. He classified as a blacksmith, and has really low skill levels in Heavy Armor and Two-Handed weapons, even though he's a master trainer in Heavy Armor (

). So even if you level him up with the Wabbajack or the PC console, he's going to be seriously gimped at higher levels.