You are playing 3.5E though - I'm specifically thinking of 5e.
I convert Immortals to Challenge Rating (not Level), they base everything off Challenge Rating because Levels are approx. 2/3rds of a Challenge Rating (on average).
So summoning CR 17 monster is VASTLY more powerful than having a Level 17 cohort.
A Level 17 character shape-changing into a CR 17 monster is ALSO broken and leads to a bunch of unbalancing shenanigans.
Allowing monsters to 'level up' ON TOP OF their stat block is fine and dandy for PCs (in 5E) but its probably not that efficient for 5e monsters in general and doesn't make any sense for Demon Lords, Archdukes etc. since none of them effectively have levels in any of the stat-blocks and it would only just complicate things unnecessarily.
I have Knight of Hell, Hell Baron, Duke of Hell & Archduke Templates (in the book) that will be a lot simpler to implement - essentially specialist Divine Ranks really - there is a substantial Hell section in the Bestiary that also includes a few new Lesser & Greater Devil variants that are servants of some of the more powerful ones in the book.
So you could take a Barbed Devil in the book - stick the Duke of Hell template on him and within 5 minutes you'll have a customized Duke of Hell, another 5 minutes to give him a signature artifact and you are ready to go.