I will say that the ratings are not always a good indicator of talent. All to often there are players who have a higher ratings who play well below that rating (and vice versa). I have gone into tournaments thinking I would be playing against 980 rated players and watched them put up a bunch of 920 rated rounds. It finally occurred to me to look at the number of tournament rounds and not their round rating to determine their actual talent level. If they are 980 rated and have ten or more tournaments which make up their rating average, then they are probably somewhat legit at 980. However, if they are 980 and they have played two tournaments, then it's probably a pretty safe bet that their rating is inaccurate.
Another thing to remember; The rating system is meant to be a yearly average and often you will see that someone's rated rounds are 6 months to 2 years old. A lot can happen to your game in six months and it's highly unlikely your rating is accurate.
Proper ratings for specific divisions... Eh, it's not a ratings issue - It's an honor issue. There are a lot of people who play disc golf tournaments to just "win" and not really "compete." It's a matter of ego which you can't regulate. You can try to keep it fair but there will always be those who play at a level below their abilities to just rack up victories because it strokes their ego.
REC should be only for first year players. INT. only for players from year 1 to year 3, ADV from 1 to 5. After that, window, the player's results should be evaluated and then directed toward the correct division. I realize that this will never ever happen, but it would keep 10 year players from playing INT.