Why not? Level up increases your defense and attack of your towers
I think it's not much useful. Because I'm at lv 5, I still can beat lv 6 rival. And they split the same level players to seperated arena, I dont scare that I will face some guys avobe my lv. It'll be interesting if they unlock constantly good card everytime i lv up xD
It's like that. You can always beat players with 1-2 levels above you but you won't be able to beat players with much higher level. However, since the game wants everyone to have a fair chance of winning, they don't match high rank players with low rank players.
So no matter what rank you are, you can keep your win percentage the same. However, I recommend you level up since there is more content to enjoy once you level up.