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DeFranco was going to be a key witness in prosecuting organized crime in New York City. With years of being a Mafia chief, DeFranco would know a lot about it's organization, key figures in it, "business" dealings, murders, etc. It's also hinted that DeFranco wanted to retire from mob life and enter the witness protection program, which would give him a new identity and a new, secure place to live.

In order to ensure his testimony would happen, Mason sends Lipton to find Rollie Tyler to plot a fake and very public murder of DeFranco. Tyler carries it but is also made a patsy and is suddenly hunted by Mason's operatives.

In the end, Mason was going to receive a huge payoff from DeFranco, who had a key to a safe-deposit box in Geneva, Switzerland that supposedly contained $15 million in cash that he'd earned (or even stole) from the Mafia over the years he was in the organization.

Yes she could have been mistaken for Rollie Tyler. She did in fact look like a man with that short hair.

Also, what is the point of filling the restaurant with their people, when the whole idea of staging it in view of the public in the first place is so ordinary members of the public will think that DeFranco was killed?

He caught DeFranco in the first place