Re: significance to testing/belt rank?
In my run up through the kyu grades, I was heavily goal/grade focussed. I got to 1st Kyu before I realised that getting the next grade was not what aikido is about. It is a welcome relief when you realise this. You can just start to relax and just practice. Since then I have been awarded higher grades, they sort of just come, the longer I stay and just practice.
I like the grading system, it serves me well as a teacher for the benefit of my students, we have a highly structured and comprehensive curriculum, which revolves around the grading system. Many techniques are not taught until the student has reached a certain level. This provides a good learning model for students to progress, and moreover prepares them for some of the more demanding areas of practice e.g. weapons.
I have little doubt that aikido can be taught effectively without the grading system, however I'm glad to be a part of it.