So when we talk about rarity, we are not talking about stats; we're talking about rarity in the truest sense of the word, how difficult something is to find and acquire, and items will be rare in Pyro but not necessarily in Stanton, and vice versa?

Yes, we have different levels of system working together for that. When a designer sets up a location, they decide specifically for that location how likely different containers should be, and they can decide how likely certain types of loot should be. But then we do have a broad grouping of which items on the whole are more valuable, uncommon, rare, whatever. It helps the designers to approach things bit by bit. They can do broad strokes and they can get right down to specifics for individual locations.