When I look at Mastodon posts, I see a decent amount of replies and boosts for popular posts, but not very many stars (see example image). I assumed a star is the same as a like, but I feel not a lot of people star a post, whereas I did see a lot of hearts/likes on Twitter posts. Are they not equivalent?
Favourites absolutey federated. They just follow the same federation rules as everything else: They federated from actor to follower. So, if no one locally is following a remote user that favourites a remote post, that favourite doesn't get sent to your local server.