As far as i know, no courses have pre-requisites anymore but the assumed knowledge tells you what level each student is expected to be at when they enter the degree.
I'd say to save money on markers...
Anyway, I think some people will scrape a few more marks than if they weren't there, but overall I doubt there will be much change
Rankings are just how many people you beat or beat you in your school in that subject. People say rankings matter because your marks will change based on the HSC results.
Just adding to what everyone else has said, if you do choose to move up, but find that you are struggling, ask your teacher. Most will be happy that you have questions and hopefully they will be experienced in teaching the HSC and be able to give you some good advice.