Re: significance to testing/belt rank?
Test to a certain level solves some politics but not all. I know of one organization that tests to nidan and then everything after is time in grade and automatic. That one bothers me and it shows in the quality of some of their higher grades since there is no correlation with anything other than time in grade- x number of years bingo you're a sandan, etc. The aikikai at least test to yondan.
Also to me knowing a set of techniques is knowing a set of techniques whether you practice them one at a time or practice all of them as you go. I'm not sure if anyone has ever studied it to see which approach gives the best quality-if that can be measured.