I think you are still confusing the use of the dynamic range from the camera. It is not something you would look at your monitor and say “wow…look at the dynamic range on this footage…its beautiful”
The Dynamic range is simply expressing how much information you have to work with during your colour process. It might allow you to take that over exposed sky, and bring it back into a more pleasant sky, because what appeared to be clipped whites (or blacks) can be unclipped, or brought back from the dead. It doesn’t mean you don’t need to be aware of your exposure during the shoot, because the colourist can fix it all, because I have so much dynamic range, but it does give you some options.
As David said, this has no bearing on how it is viewed on YouTube.
Another simple answer to your question would be “As soon as you compress anything to H264 and upload to Youtube, you are losing all sorts of information. Youtube is not known for its high quality, lossless compression standards.
As for LUTs, you are basically correct. They are tools that can be used to help convert the color space from 1 thing to another. (Slog to Rec 709 for example) You ask why people recommend using them…many people don’t recommend using them. If you are doing a conversion for a specific type of playback, for a projection system perhaps, a LUT might be used to help keep the look consistant.
Many people feel they can shoot their footage, apply a lut, and bam..colour is done, but it doesn’t work that way. LUTs might get you to a good starting point, or they might get you to an awkward starting point that you may have to colour before or after it to get the picture to look how you want it to look. It is all up to you.
Personally, I don’t typically start with a LUT.
Others will always start with a LUT and tweak from there. Personal choice. I don’t think anyone is going to look at your final project and say “i’ll bet you didn’t use a LUT did you?”
Glenn