...By contrast, the author of Yuru Yuri handled this issue far more effectively by developing newer characters in spin-offs rather than having them compete for space in the main series. This allowed the core cast to remain the focus while still giving the newcomers room to grow.
I don't necessarily think you're wrong that there might have been a benefit to relegating new characters to a spinoff, BUT to be fair about
Yuru Yuri and its spinoff, that manga is a very different animal from
Is the Order a Rabbit?
On one hand,
Yuru Yuri's core manga really has almost no character development or continuity beyond any bare minimum demanded for the "rule of funny", and on the other, I'd argue that what makes the spinoff work is that it has a very different tone and storytelling style from
Yuru Yuri's more satirical/parodic "slapstick" or (more or less) "Manzai" driven humor, with
Oomuro-ke's stories approaching the humorous elements a little more lightly and taking a little more time to get there, while focusing a little more on more traditional slice-of-life character interaction: combining the two storytelling styles into one manga would have had quite a jarring effect for the audience, and might have been pretty difficult for Yuru-Yuri's writers to keep up with as well.
It's a little difficult to find a similar situation in
Is the Order a Rabbit? For all of the characters here, we're looking at a similar storytelling style, time is passing in the story from Cocoa's arrival up to her graduation, characters change and grow over the course of the story, and we're not quite looking at either a straightforward slice-of-life thing, nor a traditional slapstick/manzai thing, though there are a few elements of both here and there in this manga. And, the characters' stories here are enmeshed a lot more closely together.
On the gripping hand, there's very little interaction between the casts of
Yuru Yuri and
Oomuro-ke: Sakurako and Himawari are the main point of crossover between the two mangas, and they don't appear often in either one, and we really seem to see a different side of those two in one comic versus the other. That's a very different situation from the one that has developed in this manga, where the characters are connected together in many different ways, spend chapters playing off of each other in new ways, and so on.
Now, where I do think a noticeable difference in storytelling taking place within
this manga is for things like the "April Fools' Day" alternate-world chapters, and the occassional Christmas or Halloween episode, or Cocoa's visits at home with her mom and sister, or - notably - the "Hotel Cats" series of chapters the girls spend in the city, where three of the four newest characters were introduced. I can see an alternate world where the "Hotel Cats" chapters might have been treated as a spinoff, with the new characters continuing on in the city, while the original cast return to the main "Half-Timbered Town" setting to complete their stories normally. The tricky part of this spin-off approach would be the way the characters' stories have woven so closely together: a spinoff treatment would work more smoothly and naturally if the characters go their separate ways instead, aside from occastional special episodes (kind of like the way Cocoa's mom and sister aren't cast regulars, but instead only show up in Cocoa's holidays back home!) Character development for both sets of characters would need to be handled a little differently - it's "tricky", but manageable - I think this manga's writer(s) can manage it if they wanted to. (They don't seem to have wanted to, and it's a good question of whether the result would be an improvement or not, but the point stands, I think: it could have been done.)
One final point on Yuru Yuri is, man, do that manga and its spinoff seem to have been moving slowly over the last year, in terms of new chapters and their English translations!
Yuru Yuri itself finally seems to have resumed new translations, but the spinoff seems to be dead in the water, without any new material in a while, and a backlog on the translations. The writers/artists seem to have their attention divided between the two without being able to produce both at the same pace, while the translaters do not seem to have the time for both, or at least as much interest in doing one as the othr. Honestly, I'd hate to see
Is the Order a Rabbit? and a hypothetical spinoff for it in the same situation! Mileage may vary, though, for those who might not care about that, because being able to filter characters they don't like off to a spinoff they never read, as long as the part they are interested in is maintained, and that's fair enough, but it's not the entire audience!