The topology in your scenario doesn't have redundancy which could result in a bridging loop, so STP is "out of work".
When you say "RSTP on switch1", do you mean a non-Cisco Switch running standard (single instance) RSTP ?
I posted some information regarding the handling of Cisco proprietary per-VLAN BPDUs of 3rd party swichtes here:
Feel free to ask for more details.
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Well, you might have some antique switches that don't support RSTP. (I got some in "my" network.)
Or, it might just be temporary while your moving from STP to RSTP.
Yes both the protocol are compatible . Reffer the software release notes .
Configuration depends on your scenario .
Even mstp is backward compatible with previous stp versions
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