There is only so much of a gradient possible just 5 different difficulty levels. I think they are done pretty well to be honest. There have been several times where I've said to myself "wow, thats a big jump between *insert star* and *insert star*" The fact that there is a noticeable jump between star difficulties is a good thing and actually indicated that they are working.

In regards to the color of the mob-con icon, it takes into account your party, not just you, so this often skews the color. I really wish it was just based on your level.