Islam does not recognize any castes, but, when it came to Persia and India, the existing divisions in these regions were adopted among the local Muslim societies. It developed as a result of ethnic segregation between the foreign conquerors and the local renverts, as well as influence of the indigenous Hindu culture.
Infact in the last sermon of Prophet (SAW) on Ninth day of Dhul al Hijjah 10 A.H. in the valley of Mount Arafat, he said:
"...All mankind is from Adam and Eve, an Arab has no superiority over
a non-Arab nor a non-Arab has any superiority over an Arab; also a
white has no superiority over a black nor a black has any superiority
over white except by piety and good action..."
You are right that caste has no importance in Islam. If you haven't already, you should try to explain the same to your parents in a respectful but truthful manner.
Also inquire with them if they know something about the boy or family that makes them reject the proposal. Perhaps they are using the 'caste' thing to be respectful to you and hide something which may upset you even more.
Alternately, if everything else if fine, try to get the help of your grand parents or uncles/aunts who are religious and understand your situation well.
At the end of the day, it is unlikely that someone on an online forum can help you much. You need help from someone closer to you.
For your wali question, please see this question:
Who can be wali, and in what order?