I use uBlock Origin + vaft from TwitchAdSolutions, which is currently working pretty well for me. I’ve had some issues before, and every now and then the stream can freeze up when an ad is played. But it’s so much better than having to endure even a second of those mind-rotting ads.
--download-sections
option. Looking at it, you might want to use--download-sections "*0:00-1:00"
.--list-thumbnails
and it doesn’t look like YouTube offers any square ones, so I would look into using ImageMagick to edit the image with a command. I doubt yt-dlp allows you to do any sort of image manipulation out of the box.