A competitor is clearly buying fake 5 star reviews, does reporting even work?

If it's blatant, it isn't only a Google policy thing anymore. The FTC in the US has a rule against fake reviews and the UK has banned buying them, so depending on where you are you can report it to the regulator as well. Whether they'll chase one small local business is another question, but it's on record if the pattern keeps going.

Sometimes. Flagging reviews one at a time from Maps mostly goes nowhere. What gets more traction is showing a pattern: lots of reviews in a short burst, reviewers with no other history, the same wording repeated. Screenshot it all with dates before you report, because if they get nervous and delete some, your evidence goes with them. Don't spend too long on it though. Getting more genuine reviews of your own does more for you than getting theirs removed.