Why would someone "play up" more than 100 points or so?

lol.  So you just turned 16 right?  Congratulations.

Notice how i said I would rather....i have played many games aside from chess that are 1 v. 1 and i have noticed that i really learned and progressed when i played with someone at or above my skill level. Im not saying this is how everyone should do if they want to become better. That method is just the most effective for me.

I would love to play Dortmund, Wijk an Zee or right now in the Kazan candidates, but for some strange reason they never invite me :(

Maybe the problem is that Anand and his friends dont wanna play with me?

I think there should be limits to how many weak players can play up how much. I hate playing much weaker players in serious OTB games because I feel I have everything to lose and nothing to gain and the likelyhood of a real good fighting game with me not blundering every other move is much more likely to happen against equal or better oposition.

Maybe theres a reason simuls get organized every once in a while?

They can and do where I live.  If you play up one section an additional fee is the norm here, and two or more is generally prohibited. 

Why do you need a FIDE rating anyways?  Do you frequently play in international competitions?

Yes, you are paying for that lesson.  However, so is your instructor.  That's the problem.  He came to that tournament in order to play Chess, and presumably to have good games against people who are in the same skill range as he is.  Instead, he spent his hundred dollar entry fee, and whatever travel costs he incurred, to play against you.  That's not a good game of Chess for him.  It's great that you get a lesson against a good player, but what's in it for him?

In "golden rule" terms, you aren't doing a good deed by playing up too far.

happy fanatic: Why do you need a FIDE rating anyways?  Do you frequently play in international competitions?

It was on my bucket list ... and while I don't play in international competitions, many of the big opens are FIDE rated. I also enjoy playing in the US Open also FIDE rated. Its not a case of need; rather, desire (my own desire) and I quite happy with earning one.

Part of the problem is that the term "open" pretty much says "anyone can play".  I wouldn't blame them a bit for making the top section "2000+" or whatever, but if they call it an open section, it's hard for the TD to say "No, you're a 1300 rated player, and we won't let you play in the open division".

I can see where playing someone like me would not make the 2000+ players happy.  They would win easily, but it would be a boring game for them, and if tie breaks came into play, it would hurt them.

 But surely you felt good after the 46th Northeastern, secure in the knowledge that you had provided great lessons to all those players who lost to you, including those much lower rated players.  No doubt you felt that such opportunities were well worth the cost of your admission, right?

 That makes sense to me.

I initially listed "hero worship" as one reason to play up, but I didn't list "desire to learn from a stronger player".  I did that on purpose actually, but I should have said something differently.

In my opinion, you don't really learn anything from playing someone who is so superior to you that the outcome of the game is not in doubt from the beginning.  At my level (currently 750, but rising!) I could play against a 1400, or against a grandmaster.  I would learn just as much, and possibly more, against the 1400.  The desire to play against a grandmaster wouldn't be based on any realistic desire to learn something.  It would just be based on hoping some of their greatnesss managed to waft its way across the board while we played.

Meanwhile, if I had an option to play against people my own level, or people somewhat higher than my own level, and instead I chose to play against people far above my own level, I would be guilty of wasting everyone's time.

 Indeed.  Ultimately, if there is a problem caused, it's the fault of the organizers for allowing it.  If players want to "play up", and the organizers don't prohibit it, I can't fault the player for actually doing it.

Nevertheless, I think the player is fooling himself if he thinks he can learn anything by being beaten by someone 1000 points higher in rating, but he wouldn't learn just as well by being beaten by someone 300 points higher in rating.

At least some of the low level players who play in the open are probably hoping to get paired against a GM in the first round.  That way they can tell their friends "I played against Anand once", or something similar.

They could probably just talk to one of the GM's they would like to play and tell them "I'll pay you $200 to play a game with me" and be better off.  That way, it doesn't effect the tournament, and they know they'll get to play that GM, instead of hoping to draw a GM in the first round.

I do think I see why some of the open sections allow lower level players.  It's about the money.  For instance, http://www.chesstour.com/pi11.htm

From that page -

Entry fee: 

GMs, foreign IMs, foreign WGMs: Free. 

Foreign FIDE rated players or US IMs: $115 if check mailed by 6/16, $117 online by 6/23, $125 phoned by 6/23 (406-896-2038, entry only, no questions), $150 at site. 

USA FIDE 2200/up rated players: $215 if check mailed by 6/16, $217 online by 6/23, $225 phoned by 6/23, $250 at site. 

Others: $315 mailed by 6/16, $317 online by 6/23, $325 phoned by 6/23, $350 at site.

So the GM's get free entry.  US IMs are $115.  US 2200+ are $215.  Below that, $315. (With price breaks for players who have to travel to the US.)

Sounds like they'll allow lower ranked players to play with the hot shots, but with higher entry fees.

Sounds like lousy customer service to me.  If there are a few people who "shouldn't be there", i.e. are several hundred points below what is typical for that section, what will happen?

if the tourney uses top half/bottom half pairings, in the first round, they'll end up playing someone just above the halfway point in the ratings, and they will lose.  After that, they'll have a losing record, and will end up playing other people with losing records.  In other words, their extra money will end up being used to fund the prize that attracts the super-players, but those super-players who actually have a shot at the prize will never be inconvenienced by actually having to play against them.  The very low rated players have to pay extra money, the people in or near the bottom half have to give up an opportunity to play one or two decent games.  In exchange, they get the privilege of perhaps attracting more grandmasters with the larger prizes provided by the low rated players.

Oh, well.  If people don't like it, they can always avoid the tournaments that do that.  Those sorts of touneys aren't my cup of tea anyway.  If the fee is more than 20 bucks, I stay home, and I think twice about more than 10.  It's up to the people who actually are affected by these rules to do something about it if they are so inclined.

Major tournaments use accelerated pairings.  There are several methods for doing this, but in general, the players in a section are divided into groups, and the pairings for the first round are made within the groups.  In the second round, the winners of the top group play each other, the losers in the bottom group play each other, and the winners of the other groups play the losers in the next higher group. A similar process is followed in subsequent rounds.  This effectively separates the GMs and IMs from the rest of the crowd.

A low rated player who hopes to play a titled player by entering the open section will be extremely dissapointed.

The open section of local tournaments in my area usually has 8 to 10 players with the ratings ranging from 1500 to 2200.  If the lower rated players didn't enter the open section, there would be no open section.

What happens if my dad makes me, an 1896, play in u1900 instead of u2100 or open?

Then should I argue

I should be able to play in u2100 as an 1896

If you're an 1840 wanting to play in the world open, play in the u2200.

(or any other tournament with an u2200 and a u2000)