Yeah, and the more chakra you'll waste....
But is all matter of time... you only can use jutsu level 3 if you have enought time to do it without been damaged (specially by a distant kunai) else way you'll lose a lot of chakra....
Even the "Body Replacement" will waste ~1/4 of the full chakra bar.
Chakra will be increased slowly while fighting.
The Rage mode will be filled receiving strong attacks or combos. Is displayed with a silhouette from bottom to top of the character face in the HUB, and will be activated pressing the Right Trigger. While in Rage mode you can't be damaged.