Critique first, constructive input later.
Ranks
1) Everytime we gain a rank include an entry in our codex about some interesting things and maybe even some heroic deeds that have been performed by Commanders who have held that rank.
Honestly - aside from RP flavor text - I don 't care about it as it does exactly nothing. Ding - rank gained. Obligatory congrats letter with fun fact attached. Great deeds of CMDRs who held that rank? Why should I even care - I'm focused on MY achievements, not some random NPC i don't even know or heard of.
2) Everytime we reach a milestone (Say every 3 or 4 ranks?) send us a personal message from that factions leader or someone who is important within that faction.
As above butfrom the pther side - why Space Princess should send me anything while I was gaining Imperial ranks? Why the sudden interest? Maybe when gaining King status - word of acknowledgement. Beyond that I don't see a rason any PP should observe my progress.
3) Incentivize players to climb these ranks by also providing material rewards along the way in the form of rare engineering materials for key upgrades like Power Plant's, Shields Generators, FSD's etc.
Slight problem - rank grinding is one time only event. One time reward would not cover your engineering needs rendering said blueprint unavailabvle once your reward runs out.
Now for input
Current grind is just a grind only to unlock ships (I don't count systems as they are meaningless - besides maybe Sol). For me rank grind to be interesting it had to be like this.
You decide to start ranking. You visit given military HQ and accept general quest/mission. You are given a rundown of how many ranks are there (I had to wiki it) and how to progress through them. Simply put - run missions for faction, show your dedication. Since we have lots of ways and jobs - each completed mission for PP main faction awards a "merit" (token, proof, call it as you want). You need X amount to reach higher rank. higher ranks require bit more merits.
Upon reaching required quota you get a prompt - head to HQ, visit military contract and bam. In recognition of your effotr you are granted a rank up and a reward. Be it credits, system permissions, ship unlocks, purchase discounts, paint jobs, ship kits... Yeah, you could get in-game shop things via this system.
Run enough missions, and it doesn't matter if it's hauling missions, assassination, passenger or what not, and you get to max rank. Some missions would grant 1 merit (easy ones like data/cargo runs), other more. Depending on difficulty, like killing serious pirate threat or Thagroid. Want fast rank run - do high risk high reward stuff. Want easy way - do easy stuff but it may take a while.