Very useful post, thanks for sharing your insight.
It would be interesting to know how much of an overlap there is in the following of similar tags.
To borrow your example: Life Lessons has 156k followers and Life has 177k, but there is a good chance that people who follow one tag will also follow the other. Instead of reaching 300k+ individual readers, you might be reaching around 250k by tagging them both. Same for Reading and Books, or Fiction and Short Story.
If I'm publishing a piece of short fiction with LGBTQ characters, for instance, maybe a combination of "Short Story" and "LGBTQ" might reach more readers than a combination of "Short Story" and "Fiction", even though "Fiction" by itself has more followers than "LGBTQ".
Not sure if it's possible to know it for sure with the data that's currently available to us, but I thought that would be something worth considering—especially when writing for publications that allow you to pick just two or three tags.