Hi,
I would recommend reviewing the Rancher documentation at Checklist for Production-Ready Clusters | Rancher
As far as a design, the answer is going to be it depends on your needs. But here are some standard designs for RKE1 and 2 clusters. Rancher-Deep-Dive/ch04/standard_designs at main · PacktPublishing/Rancher-Deep-Dive · GitHub
Note: I cover these in my book Rancher Deep Dive: Manage enterprise Kubernetes seamlessly with Rancher https://a.co/d/0pjMRlJ
As far as choosing between RKE1 and 2. RKE2 is recommended because RKE1 is based on Docker while RKE2, based on containerd, is a much nicer product.
Also, it is recommended that you deploy Rancher as its own cluster and then deploy a downstream cluster(s) to host your applications.