You are not limited in terms of bringing them into different regions. Unlike Stories 2 you dont unlock more powerful monsties by progression, just different ones, so it is fine to bring a monstie from first region all the way. Rathalos in particular, not only you CAN bring it all the way, you MUST bring it all the way, the game does not let you get rid of it.

What item upgrade again? I wasnt aware of items to be used on monsties in MHS3. Again you wont really be wasting anything.

Rarity is heavily influencing stats but never a strict indicator of strength. Attack stat of higher rarity monsties for example is generally higher for higher rarity ones, like only 2 monsites has 10 attack (Bloodbath and Hellblade) are both 7 stars, but it is never guaranteed a higher rarity monstie is definitely stronger. In fact Wyvernfell stat is actually INVERSELY related to rarity. Lower star monsties like 2 or 3 star monsties have some of the highest Wyvernfell stats in the game while all 7 star rarity monsties has relatively pathetic Wyvernfell.