I actually took Icelandic for a semester, and my Icelandic dictionary says: "ráða (ræð; réð; ráðinn) v.t. advise; recommend; ráða e-m áð gera e-ð, advise s.o. to do s.t.; with dat. rule, govern." Nothing about bottoms anywhere.
It seems an obvious cognate with the Anglo-Saxon ræd and Middle English rede, all meaning the same thing - counsel or advice. I would think the Icelandic for the hinder parts would be a cognate of the A/S "buttuc" which means what it sounds like.
Normally in Norse you see the word "ars" employed or its variations. One of the older variations is "ard" and sometimes with a prefix "r".