Hi judi_aidoka,
You don't test for ranks per se at WL, but there are levels that you test for with a specific set of requirements for each. Like yu shan says, there are no colored sashes, everyone wears a black sash. IME this fosters respect for each other because you never know from just looking at a person how skilled/unskilled he is. As far as the specifics of the testing, when you sign up you receive a student handbook that explains a lot of that (and includes some test questions that you'll have to answer at various levels).
The lion dancing is an inherent part of many CMA schools. Very much a tradition. I encourage you to check out lion dancing at Chinese New Year even if you don't join Wah Lum, it's a very demanding skill.
Iron palm is a specific training technique that takes a lot of time and dedication. Sifus will usually select a student who has demonstrated that he has the dedication it takes to undergo the training. Of course, you can mention to the sifu that you are interested in learning iron palm. But in any traditional system you may train for quite awhile (years) before the sifu decides you're ready for iron palm.
There is a great streak of violence in every human being. If it is not channeled and understood, it will break out in war or in madness. ~Sam Peckinpah