Is "Empiricism" correct in its assertion that all knowledge is utimately derived from the senses? Why, and for what reasons, did the "Rationalists" object?
Like so many other questions of philosophy, the answer to your first question depends heavily upon who you ask. Usually scholars agree that the most consistent (even radical) form of empiricism was articulated by 18th century philosopher David Hume, who argued that only sense experience can be factual. Everything else we claim to "know" is actually subjective value, which is not real knowledge.
Although this might sound like common sense, there are some peculiar consequences of this epistemology. The most famous one is a problem Hume himself explored in his Enquiry Concerning Human Understanding: namely, the law of cause and effect. This is interesting because all scientific facts depend upon the law of cause and effect (think of Newton's laws of motion, for example). But it is not possible to understand cause and effect via sense experience. Sure, we can see the before and after of the billiard ball hitting the other billiard ball, but we cannot see whether the same thing would happen in another situation--even if everything in that other situation is exactly the same. Hume is reduced to saying that cause and effect is just an example of "custom" or "habit" instead of knowledge. Consistent empiricism, therefore, is actually quite skeptical of most of the things we think we know--science included.
In response to your second question, rationalists like Rene Descartes distrust sense experience altogether because they understand how prone our senses can be to error. Think of all the times we mistakenly "hear things" or "see things" that aren't really there. Rational abstractions such as pure logic or mathematics aren't subject to these sorts of errors, so for philosphers like Descartes, rationalism provides a certainty that empiricism cannot.