Um, first, we could probably use a more loophole free description.
Secondly, 800 words for an S rank? That's hardly a full post. WAAAAY too easy.
I think it should come down to this though as far as points vs. training go; Pick one or the other. If you keep both, I think points (as they're kind of like a measurement of experience) should simply reduce the amount of your training. WAIT! GOT IT!
Base a ninja's rank on the amount of mission points he's acquired.
Say that:
An AS would start at E Rank.
As soon as she's acquired 10 points (she's an academy student, cut her a break.) she'd move up to D rank.
(This does not change her title! As that can only be done by graduating or your kage promoting you)
Likewise a Genin would start at D Rank.
A Chuunin at C
A Jounin at B
A Sp. Jounin/Anbu/Akatsuki at A
and Kage's/Org.Leaders/Sennin at S.
SO!
This would mean that as a point scale, a ninja starts at zero if he's an academy student. As soon as he hits ten he jumps to D rank, 50 equals C, 100 equals B, 200 equals A, and 400 equals S. (Let's make it hard to get to S rank, or the site will fall apart.)
So, for every letter rank you achieve, Techniques of a certain letter rank vary in how much training is needed for them. The better a nin you are, the easier techs are to learn. This would also provide a power guide aside from just titles. A genin could work hard to get as high as an A rank, and a Sennin may only be a B rank, as his Kage promoted him to early, or for the genin, not at all. I think the letter ranks I gave to the titles, should only ever be used for new apps.