Nez is free to add what she wants to this, but here's a few cents for your time.
Are we supposed to recommend anything as long as we think is good? Or am I correct to assume that the idea is to focus on more obscure, less known series?
This entirely depends on the context. The thread is meant to be used in two ways, A) encourage others' to read something they've missed, and B) look for suggestions based on certain criteria. If one is going for A, than they ought not focus on the biggest and baddest yuri series. The logic presented in your post is fair. However if one is responding to a post regarding B, than any and all recommendations are encouraged, so long as they fall within the OP's criteria.
Also, do we limit the recommendations to series found right now in the Dynasty Reader, and leave out those series that were removed or have never been uploaded? Or is anything fine as long as it's yuri?
Generally speaking, anything is fine so long as it's yuri, tagged Yuri
or Subtext
here, or passable for one of those categories. Please be careful not to break Rule 8 when linking to outside sources. Linking to any outside reader with ads will likely see your post or link removed. We have no issue with removed/licensed content being recommended or discussed. However, as a matter of courtesy I would ask that users not directly link to said content, for reasons that are hopefully obvious on their own.