she would rather have been playing

[keannu]

1. I think "would have pp" is either presumption or counterfactual imaginary result in the past and this sentence refers to the hypothetical past result. Then what is the function of "rather" in between? instead of something? Is it like "I would rather go than stay here"?
2. Is "be satisfied doing something" okay? Doesn't it have to be "satisfied with just being"?

7)Cylie simply didn’t have enough strength to play basketball. To make matters worse, her doctors had instructed her to avoid heavy physical contact, which is impossible on the basketball court. So, instead of going back to play the sport she loved, Cylie had to settle for sitting on the bench and cheering her teammates.settle for something Of course, she would rather have been playing but she was satisfied just being with her friends again.

 

[keannu]

Does this "would rather" in the past denote an intention?

 

[Chicken Sandwich]

2. Is "be satisfied doing something" okay?

Yes.

Doesn't it have to be "satisfied with just being"?

You could insert "with" but it's not necessary.

 

[keannu]

I'm really curious about what this means.
she would rather have been playing

 

[emsr2d2]

For her, it would have been preferable to be playing the sport but she was happy enough to sit on the sidelines and support the other players.
She would have preferred to be playing but she was happy enough ...