I'm a GenZ-er, and I adblock everywhere I can. What makes the difference with YouTube premium for me is that I fall asleep to YouTube videos on a TV every night, and the advertisements alone can make that experience terrible because you can't adblock YT on a TV as easily as elsewhere. Premium might be one of my best decisions I've made for a platform I spend so much time on. I still donate to Wikipedia and uBlock even if I pay the premium for other services.
Youtube premium makes sense for me when combined in a family account for 5 with youtube music for 17.5 USD in total.
But besides that, fuck Google. Id pirate music if I wasn't so lazy but Google diminishing anything of what I currently get would probably give me some energy.
I do the same, but it has to be on my phone, and last I checked that wasn't an option with the screen off even with Premium. So I used Vanced (and now Revanced). I have moderate-to-severe tinnitus and this setup might have saved my life once or twice.
Premium has background playback! I use it to listen to video essays with my phone in my pocket when I'm working, screen off. Revanced was my go-to before premium but it has been a pain for me to patch recently (I'm just lazy) so I'm just using stock YT with Premium.