Your question lacks some focus but this has grown too long for a comment. Generally though your questions are related to a single theme so I'll have a crack at them.
Would it be wise to delay graduating in order to work for an extra semester?
That depends on the type of work you'd be doing, the odds of finding work when you graduate, your personal situation and preferences, whether you'd continue working for the same employer after graduating and so much more.
Generally speaking, unless you have very clear and convincing arguments for why this particular work experience will make you a more attractive candidate in the field you want to pursue, you should always prioritise graduating. In all fields, employers routinely hire graduates as "affordable" employees with the expectation that they'll need to get used to the working world. That's a system that works and if you delay your graduation you risk entering the job market at a time in the year when fewer companies are hiring graduates or some year(s) after your peers. Having a longer-than-standard timeline for your degree (5 years as opposed to 4) is also a potential blemish on your history. It won't disqualify you but you'll typically be expected to explain why you choose to delay graduating and you'll need a convincing reason.
Work experience and internships are key differentiators for your profile as a job candidate but a few months or even a year of experience is usually not worth delaying your graduation for that same length of time.
Will this experience allow one to apply after graduation as a "Level I" candidate instead of "Entry Level", thereby significantly raising their salary?
No. The "entry level" mark will apply to you for at least a year and more commonly two. The most significant relative raise in most people's careers happens after they've got 2-3 years experience and move on to a new company.
As a graduate I will also be competing for larger salary numbers against others who will most likely have this industry experience.
Not true. You'll be competing for jobs, not salaries. People with that experience have an edge over those without, but that doesn't typically translate to a higher starting salary, unless it's a few years' full-time work experience, but those normally aren't competing with your for entry level positions. Most of your competitors will have internship experience or part-time experience, often in unrelated fields. That counts for a lot in getting people to the top of the candidate pool but for very little when it comes to entry level status or salary. Aside from that, many companies don't negotiate salaries for entry level candidates anyway.
I believe it is in my best interest to begin working before graduation, because companies may more readily hire cheaper workers and I may be allowed a more pleasant learning curve as I start out. I do not want to enter the workforce full time and be let go because I didn't judge my capabilities correctly.
Unless you end up working for a very unreasonable employer that's operating in bad faith you won't be. As a graduate with no experience you'll be expected to need some time to settle in and get used to office work. You will make mistakes but long as you focus on owning up to them and learning from them you're already ahead of the curve.