3. The players don't lose any quality at all, they are just comparitively worse.
Do you want the players to all become much better because they were promoted?
4. On relegation the players would hence gain a star, becausue they would be better in comparison with the other players.
5. I think some kind of reward would be good for star players. Maybe an achievement, or rests, or some small improvement.
8. I think everyone agrees people should be the same level, really.