I am up to, and have completed, Radical highway. I have at least a D on all courses, with many being completed with an S or A rank. I don't know where I can go from here. I cannot advance any further.
Complete the "Challenge" Missions to obtain the boss keys, then defeat the next boss. I'm not familiar with the level progression in the 3DS version, as I have cleared the entire xBox 360 version (S Rank on all but Time Eater), but the mechanics should be the same. If the next boss fight is the final boss, you are required to have all the chaos emeralds before you can advance, in which case, you will need to explore the over world to find the rival challenges, defeat them for the emeralds, and then place them in the 'gears' to advance.