Re: significance to testing/belt rank?
Testing isn't (or shouldn't be!) about ego and rank. Rather, they serve as training aids, milestones. For the student testing, they provide some focus and structure to his training and gives him the opportunity and encouragement to really "dig in" to what a technique is all about.
For the senseis, they provide an opportunity to see a student at his best (hopefully!) They show the senseis where attention may need to be focussed in future training, and again provide some structure to teaching.
Tests are about growing and training- not about ego.