Subdomains I would definitely use on the site when it’s hosted on the domain. Can’t use it in localhost ??
I had saved my blog permalinks as ‘sitename/blog/postname’ in the site admin. As you say, I would not make a separate site in the network for blogs, but in the front end at least I need four microsites.
So when I finally switch to the domain, I preferably want to find all my blogs at blog.sitename.com.
The whole idea of the site is based around these pretty looking links so to speak. If this can’t happen, the site would fail. ??