Upgrade Rails to 8.1.2 and modernize config #703

Bugbot Review

Bugbot Analysis Progress (8m 11s elapsed)

✅ Gathered PR context (2s)
✅ Completed bug detection (8m 4s)
✅ Posted analysis results (5s)

Final Result: Bugbot completed review and found 1 potential issue.

Request ID: serverGenReqId_3bac8bfb-bf06-4edc-b8e8-2519ffa0869e

Cursor Bugbot has reviewed your changes and found 1 potential issue.

^{Bugbot Autofix is ON. A cloud agent has been kicked off to fix the reported issue.}