Heyo!
First off welcome to Skyblock, and I hope that you're able to have a great time on the server!
So as you said, there are 2 options to level up your island when using [/is level], either upgrade 1 level or 10 levels, and the prices / price formulas are also found there as well. When leveling up your island it should announce what level you have upgraded to in chat, regardless you can check your island level at any time by viewing the stats bar on the right side of your screen, or also by hovering over your name in chat. If your island was not upgraded and it still took the money for some reason, I would recommend making a support ticket [
https://manacube.com/support/] however I have not heard of any issues recently regarding island level. You may have experiences a lag spike or something along those lines which made it appear as though it didn't upgrade so be sure to check your island level first.
Additionally, when leveling up your island you unlock the ability to *place* (Thank you Dutchy for correcting my typo) certain spawners in [/shop], and the level requirements for each spawner can also be seen there. There are no direct rewards for leveling your island up, however there are some island quests under [/quests] that require a certain island level, and [/rankup] also has some island level requirements. Apart from those however, there are no in game item rewards for leveling up your island. Of course there are still the monthly payouts that go to the top 3 islands at the end of each month, however that's not what you're referring to I believe. You're free to see more info about that at [/warp leaderboards] in game, and you can also do [/is top] to see a list of the top islands.
Also to address your last question there are no ways to level up your island outside of using the in-game money upgrades under [/is level] for the current competitive system. You can however upgrade your island's spawner limit and chunk limit under [/is upgrades] using mana, however this is NOT the same as your island level (Also note the other 4 is upgrades are currently not working).
Don't stress as Skyblock can be pretty complex at times, and I hope you're able to get everything figured out! All the best,
- Icebarge