Yes, you set the fretboard flat when fret levelling. That's why you need a notched straight edge a sit;'s teh board, not the freats that need to be level to start with.

Rattles above the 12th fret means the saddles need to come up and the truss rod can be straightened a bit more.

I never bother to measure the relief on my guitars because I like the action as low as I can get. I normally set the saddles up so I can play OK and bend strings on the upper frets, but the neck relief means that the strings are a bit high off the frets in the 3rd -8th fret area. So I'll do a 1/4 clockwise turn of the truss rod, which will straighten the neck out, lower the action in that low neck area but also lower the upper fret action as well, so that saddles need to come up slightly. Then assess where you are, and repeat the truss rod turning and then saddle raising until you get to the point where the lower strings are starting to buzz as well because the neck is too flat. Back off the truss rod slightly until that stops, and that should then be pretty much it. At this point. check the fret slot heights again, If you can lower them, then the action will come down all over the neck without risking any rattles.

Sometimes I find I still struggle to get an action I'm happy, so I'll put more relief in the neck, set the saddles higher and start all over again. Occasionally I end up rechecking the neck for high frets and may re-level if there are more than a couple which seem high.