Everything starts at level 1.
And word of advice, if you are planning on dismantling an item, do it when it's at its 'star' level. It will give you more/better items than if you were to just dismantle it. But not always, only most of the time. It's usually worth it to upgrade a crap item you plan on dismantling (unless it takes a lot to max out).
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Also, is it good to only focus on leveling a few people's items, or is it better to balance things out and level everyone's gear together?
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Just depends on how you feel, who you use.
I mean, I expect John to come in here and play the game
for you via this thread and tell you who to use, how to use them, what items to use, and how to level it - but just do what you want to do. If you use certain people more, give their items more attention. Or, if you don't like doing it that way, do everyone equally.