Now, Rhea, I think you're being much too generous. Rhea and co were there when the crested nobility was created . Odds on, they were directly involved. Of course they don't care much about it either way, Rhea's goals are largely detached from it, but "eh, it's whatever" is a pretty abominable stance for them to take, as the creators and direct beneficiaries of the system.
Trying to glean details about Rhea's past is difficult, but I think the little information we do have starts to paint a fairly interesting picture when you start to put all of the puzzle pieces together. Yes, Rhea was around for the creation of crests, but from what I can tell she isn't necessarily the creator of the crest "system" or a proponent for how they're currently being used by the nobility.
Crests and holy weapons are all harvested from the corpses of different dead dragons and, based on Rhea's personality and the comments she makes throughout the game, it's hard for me to imagine that she's fine with humans harvesting the body parts of her slaughtered family members simply so they can create and use overpowered weapons. Rhea seems to treat the "holy" relics with a certain degree of reverence, and seems to want to have them either within the church's control, or monitored by the church, which is why Rhea has the church intervene during Miklan's rebellion, and why the sword of the creator is sealed in a tomb.
Based on what we learn, I have two theories on the creation of crests and relics:
1. Rebelling humans developed them after killing several dragons, leading to creations like the "crest of flames" and the "sword of the creator", and Rhea responded by creating and giving crests to humans that support dragon kind (i.e. the ten elites).
2. Rebelling humans slaughtered a number of dragons and, in desperation, Rhea used the corpses of her family members to create crests and holy weapons, bestowing them on the ten elites.
In either scenario, I don't believe Rhea deserves the lion's share of the blame for the crest system. I also think it's worth noting that the terrible experiments done to Edelgard, Lysithea and their siblings, are carried out by those who slither in the dark, and are being done in-part because they want to end dragon influence in Fodlan once and for all. I actually find it highly ironic that Rhea and Edelgard end up getting pitted against each other, when both of them despise TWSITD and what they're doing. Though, as you rightly pointed out, Edelgard is more focused on systemic reform rather than revenge.
Got the same impression, Seteth is open with his dislike of the crest system (Ingrid support) and Rhea only cares about 2 things, bringing back her mother and killing TWSITD, Edelgard just needed to sell out TWSITD for Rhea to join her
Think ony Rhea was present at the time, Seteth was probably in cryo sleeping, and I mean the crest system from what it sounds was neessary to bring stability at the time and Rhea mostly benefits from the system by hidding the truth that her bones make powerful weapons, so basically just there so people don't genocide her people. And being indifferent In this case while horrible is understandable, hard to help those who killed your people and despite that she still lent them her peoples remains to calm things down.
But from what we saw the church is actually not that powerful, the church by itself isn't a danger to any of the 3 main powers, much less if they were to unite. And a war against a few rebel nobles and TWSITD would have been a much better result, easier to accomplish and less bloodshed. But she was too proud thinking she was the only one capable of bringing change, which she was wrong about as seen on other routes
I got the same support conversation between Seteth & Indgrid. There are also other comments that suggest the church leaders aren't huge fans of the current system, like pointing out that the only reason separate dorms exist for peasants and nobles is because the noble families insisted on them. Conversations like that, and the fact that priests and other high-ranking officials do NOT need to be crest bearers, heavily imply that the church is open to the idea of meritocracy as well.
And yeah, I completely agree with your take. The power of the church is largely overstated. And by "power" I mean the church's political influence rather than its military strength. It's clear that Rhea isn't ruling the three countries of Fodlan from the shadows, and at the start of the game she has next to no influence in the Empire . . . which also coincidentally happens to be where most of the horrific crest experiments are taking place.