Question on star ratings

I ask for a scout report on a team, I see that their top DC is rated 3.5 stars in this report

I scout this player individually and the scout report returns 1.5 stars ability and 1.5 stars potential.

This means the star rating is all relative?

To the other team he is 3.5, to me he is 1.5?

And if I manage to get a really top player, will the rating of the others decrease as this new top player is now how the 5 stars is now calibrated?

All the players I now am a) gettning recommended by the scout b) recommended by the backroom advice, are now all in the range, 1.5 or 2 stars. Is my bar set higher?

I'm guessing and hoping that this means, even though I cannot get any better players, compared to the other teams, I'm still OKish

What are the experiences of others with the star rating? and how do you interpret them? I'm happy if the above explanation is close.

I ask for a scout report on a team, I see that their top DC is rated 3.5 stars in this report

I scout this player individually and the scout report returns 1.5 stars ability and 1.5 stars potential.

This means the star rating is all relative?

Yes star rating is relative to the league/country you play in as well as the other players in your team.

And if I manage to get a really top player, will the rating of the others decrease as this new top player is now how the 5 stars is now calibrated?

Yes except the calibration really occurs at 3* rather than 5*

To have a 5* player it means he has to be a lot better than the bulk of your squad.

All the players I now am a) gettning recommended by the scout b) recommended by the backroom advice, are now all in the range, 1.5 or 2 stars. Is my bar set higher?

I'm guessing and hoping that this means, even though I cannot get any better players, compared to the other teams, I'm still OKish

What are the experiences of others with the star rating? and how do you interpret them? I'm happy if the above explanation is close.

As your team improves it will become harder to find players that would improve it as there are less "World Class" players in the world than "Premier League Class".

In a world class squad you would usually find several players who are 2*/2.5*

Yes the star rating is relative to your club. For example, if you were managing a team in one of the Asian leagues, you may have a player at your team who is rated 5 stars. However if he moved to Barcelona he may only be 1/1.5 stars as he is being compared to much higher quality players.