No additional options?

NOW YOU WANT LITTLE FLAME INSERTING SYSTEM THINGY

Flames are just basically re-rolling an item's stats from when it was dropped. It's not really an upgrade system like the rest of that stuff. Oh, your weapon started out 3 atk below? Well, flame it, now it's like it was 7 atk above instead, like that. Pretty sure you can't end up with under average stats after flaming, but your bonuses could go down, flame the same weapon again and it might go to 4 above average instead, or average, or 10 above. But you can flame to your hearts content as long as you had the appropriate flame.

could you additional options a character locked item (e.g. reverse item) then karma it over to another character? If it worked that way I was gonna karma over my old knuckle to my Thunder breaker when they got revamped.

No, it doesn't let you trade completely untradeable equips.

additional options at least tried to help it, even if it was a tiny bit

Additional options didn't really do much for the gap since bonuses are pretty much equal across the higher leveled stuff stuff, it didn't make the gap smaller, but it didn't make it bigger either, more of a shift upward, but it was kind of a positive because it let everyone get stronger instead of just people who can afford to throw money at the game.