In summary, YouTube can indirectly get a lot of payment/money/resources, from the people who don't watch the adverts (e.g. because they block them or ignore them), and who never subscribe to it.
I'm sure there are other models that might work, but the bottom line is Google needs to get something out of the relationship, and in almost all cases, that means you (or at least some significant fraction of users) are giving something up. It is not quite zero-sum, but there's not much that earns Google money that helps you, outside of very specific targeted advertising, like you describe, which is still advertising. Your #1 for example is way more offensive to me than inline advertising, that is literally 'selling your information' that people always bring up, which is something that Google doesn't currently do. Getting more views from people who also won't see the ads is actively harmful as views cost them money; ultimately they need people to watch them so that they get paid, which isn't likely to increase if they let you just turn them off.
I (partly painfully) accept, that Google/YouTube, need to transition, from what was mainly a free service, with ad-blocking being (possibly disliked, but accepted), to a much harder stance on either receiving/viewing ads (ad-blocking disallowed), and YouTube subscriptions, being the desired (goal) objective, of Google/YouTube, much more so, than before.
As I (and some others), have previously said. They seem to be pricing it, significantly too high. Also, I'd prefer (and perhaps they would get better results), if people got more perceived value from such subscriptions.
E.g. Amazon Prime, can claim things like cheaper/faster/free delivery services, cheaper (prime exclusive) items in some cases, included ad free (may be adding ads, at some point, in the near future or already, unless you get another subscription, country dependent), and a number of other things.
Hence the Amazon prime subscriptions, make sense for some people.
Just spamming horrible, ultra-repetitive, petty / silly (in my perception), adverts in a number of places, with YouTube videos, then trying to sell a partially blackmailed subscription, to avoid those highly annoying adverts, that they are forcing people to watch.
Doesn't seem to put me into the buying mood ("Hey, maybe I should subscribe to that?").
Whereas, other subscriptions, at apparently much better price levels, free trials or month or months, if you take out their subscription services. Seem much more palatable.
I suspect, that if Google had charged $9.99 or whatever, right from the start for searches, we would have never heard of Google, and they perhaps wouldn't even exist, now.
Of course not, that is the story of so many tech companies. Launch for free, get users, and figure out how to monetize it later. Ultimately that depends on venture funding, which depends on people believing money can be made, or it will eventually collapse under its own weight when people stop believing and stop funding the operation of the service, regardless of how well-loved it is.
Search is funded by, you guessed it, advertising. Being the top Google result for your search term and desired demographic is apparently less offensive to folks than being forced to view an ad, and likely also more valuable to the advertisers paying for that placement, so there's less 'noise' about this, but ultimately this is the same basic model as YouTube and pretty much everything Google does.
It's interesting and maybe enlightening that AFAIK none of the new AI hotness is free.
I think the recent AI things, are considerably more expensive. Because some of the activities, need big, expensive computing horse power (computers and/or graphics cards). So they need to pass that cost on to the consumers.
When it costs the company, $0.00001 for a quick search or similar, because of the 0.01 seconds CPU time of one webserver. It can be easily paid for by advertising and/or other things.
But if you use up a (wild estimated time) couple of minutes (perhaps to draw an AI generated image or complicated and long text thing), of a $250,000 computer, jam-packed with very powerful and expensive, very high end, specialist (AI) graphics cards. It perhaps is costing them (wild guess) $0.25 a time, for such activities (big difficult things, small or medium things, are probably more like $0.01 or less).
Hence the paid subscriptions, and usage limits, to minimise losses, if someone tries to use it too much.