How does rank affect your character, exactly?

Does your character become stronger or faster? It appears that way to me -OR- does it just make beating lower ranks easier. Thanks.

 

Other than a title and items (that are only cosmetic), nothing really... but higher ranked AI characters become "dumber" and block less (if you're around the same rank).

 

The ranking system was mainly made for the arcade scene in Japan. Better players get higher titles and everyone can see how leet they are