I cannot know why you haven't already blocked that domain if that would be your goal.
Feel free to do so, but note that blocking domains may well result in overblocking if the same domain would be used to serve content as well as ads.
Also note that there have been numerous attempts to block YouTube through DNS-based filtering by a different means - ultimately, all of them seem to have been countered by YT/Google in the end. You may use this forum's search options to find out about that history, e.g. How do I block ads on YouTube?
The complete URL would only be accessible for HTTP requests.
Nowadays, the vast majority of websites is using HTTPS.
To examine those, you would need to forge certificates and stage a MITM attack on your own network's traffic. But this would fail if the receiving website is prepared to thwart such attempts, e.g. by using certificate pinning.
In addition, you'd need considerably beefier hardware to run such a proxy than would be required for running a Pi-hole filtering your entire networks DNS traffic only.