So I want to have an empty star in my object; almost like a hole in the middle but star-shaped. How can I chop out the star shape in my object and make it transparent?
Pathfinder is your friend, for things like this.
Starting with my two paths (rectangle and star).
Make sure the object that you want to punch out is on top of the object you want to make the hole in.
Pathfinder (Window > Pathfinder). I like to keep mine pinned to the toolbar on the right, because it gets used a lot. Make sure that both paths are selected and press the circled option (Minus Front).
That will give you this result:
As you can see, the two paths have now been combined into a
Compound Path and the star is now a hole in the rectangle.