So, I see "observer" as my status.
That will depend upon where you were looking. If you use the
User Account Services, for example, to check your rating, it should show it as "Pilot/Observer."
Does my status remain "observer" or does it change as I acquire various pilot rating?
The "Rating" here is more aptly described as your
controller (or ATC) rating. Obviously, pilot certifications have no bearing on that, hence why you'll see it remain unchanged.
Also, I have passed the ZLA V01 and V02 rating thus far with plans to take VO3 shortly.
Those aren't VATSIM official ratings at all - they're completely separate. Thus, you won't see those show up in any VATSIM-provided data source.