Should I apply for grad school at higher-ranked institutions besides the one I am working at now?
You should apply to programs you are interested in working in, regardless of their ranking.

If you are worried about upsetting your current supervisor by letting them know you might be interested in working elsewhere, consider this: If your supervisor won't allow you to apply to other programs they are a jerk who doesn't have your best interests in mind, and you should work with someone else.

A good advisor will write you recommendation letters for any program you are interested in and let you make the decision, because it's your decision, not theirs. They are free to be disappointed if you decide to go elsewhere because they value your contributions to their lab, but they are abusive if they threaten to withhold recommendations to keep you in place. If you trust your current advisor enough to work with them in the future as a graduate student, you should also expect that they will be willing to write recommendations for you for any programs you are interested in.

That said, it would be both impolite and misguided for you to rank the opportunities ahead of time. You should not attend an institution just because it is "top XX" on some measure of rankings: you should attend the institution where you are most likely to learn and produce good work. A key element of that is the selection of your advisor. Working with a helpful advisor who has your best interests in mind is going to be a far better learning experience for you, regardless of "rank" of the institution.