That's actually a good analogy.
However as Nik said stars are pure cosmetic to show you the quality of your players at the level you are at the moment. If you check players quality you will see that is not changing.
If at level 1 you have a player who's 7 stars, a team who's level 2 will see your player as 6 stars, that's why when you move to level 2 you will also see that player 6 stars.