Also, where do I store the backup Yubikey, or any other pass key owning device for that matter? It has to be easily accessible to set up the pass keys, but also safe from accidents like house fire.

There's a strange tension where I want to use pass keys because they are easy to use but also they are easy to lose, so I choose a KeePass synced over cloud and deal with a bit of a hassle by having to copy/paste my passwords.