Don't require your users to learn 'jargon' like a numbered ratings system or stars. Use plain language to allow them to assess their progress.
If the goal is learning and memorization, inform users of when they'll see content again with spaced repetition hints.
Because the goal is familiarity and fluidity ('I know this!'), you can use some info in the inspector panel to indicate how soon they'll be seeing this word / content again. Supermemo is a system based on this.
It may not be stylish, but Anki is a flashcard style deck that allows the user to select when to remind them next: it gives more control to the user to judge how familiar they are. I've used it for programming.
Jargon just means the user has to conform to your model, which may not be the mental model they hold for themselves about a concept. See Don Norman's description:
Ratings often are used for social proof by business to develop trust. Your goal is knowledge acquisition, not preference or proof.
Anki allows users to see how soon they'll memorize content with a simple label next to the button. They can use this to reflect on how well they know and understand a term.
It may not look stylish in Anki, but you have a lot of space in your inspector panel at this stage in your design: You could do stacked buttons with the next time showing (if you expose your logic to the users).
download bmml source – Wireframes created with Balsamiq Mockups
UPDATE: Evaluation of your recent changes.
You seem on the right track; a few things to note:
Your color intensity scale seems to be making the UI more dense as they achieve mastery. You have the darker scale towards the 'known'. That conveys a more cluttered UI just as they are mastering the vocabulary. That gives the message that there is more work for the user to do, not less (even though they are mastering the subject).
You could provide an assessment of the overall progress by making a dynamic title that shows them the percentage (or some meaningful metric) of their progress. As they mark items as 'known' the metric increases.
In my opinion, learning is a 'relief' and having the color bars disappear means there are less elements to interact with: Since I've mastered the word, it's affordance goes away (but hover on a word can allow user to reset the level of comfort). See notes below.