The Lv only represents their relationship right now. It offers a bit of stats for traits, like 1 stat per level but that's it. I am planning to use it to unlock the monster's benefit, for example, Queen's Nest will only be available if Slime Eye is Lv 8.
As for the direction, you might have passed a habitat of the local species, so it asks you to turn around. Also there could be more than one species in a territory.