The biggest problem I find with offside
The biggest problem I find with offside isn't even what you highlighted. It's:-
1) Resolution. If there are a couple of inches in it, you simply can't tell from that camera angle with that resolution. Yes, often you CAN tell to that level of precision as an AR
2) The camera and digital line don't cope at all when you're trying to compare the torse of a striker leaning forwards against the feet of a defender. It's only handy for comparing feet - to - feet.
I do disagree with your conclusion about when it should be used. Bear in mind that a missed offside can still have a match changing impact even without leading directly to a goal. It can lead to a penalty. Or a corner that leads to a goal. Striker who is through is fouled and the defender is booked or sent off. Even if the ball goes out and there's a sustained attack that lasts for several phases. It still matters to get it right the first time.
Not going to be 100%, but it's a preferable solution to 'let the close ones go'.
Given the don't flag unless they're certain, then it also raises the question - precisely what do you think they should 'not' flag for? Are you saying the AR should stand there and think 'well, I'm 100% certain he's off, but I think he might be off by less than 6 inches, so I'll keep it down. Actually, maybe it is more than 6 inches, yeah, I'll pull him up'? I don't think your solution of 'don't flag the close ones' is as simple as you may think
VAR should be there when you truly can't tell or stuff it up completely. It shouldn't be taken into consideration when you're making the decision, IMO.