I think Death may be some manner of formerly divine being, as Leon does mention his powers are of divine origin.
My guess is that Death was something akin to a heavenly guide who abused his powers and was cast out as a result.
As for his connection to the Crimson Stone, it's possible that it may be what keeps Death from going to Hell, if my above theory is correct. But, the stone wouldn't work unless it had bonded to a soul from our world, so Death protects the person who holds the stone, in this case, Dracula.