Piltdown Man
I think your understanding is correct, anything less than 1,000 above highest obstacle within 5nm is definitely illegal. Don't think that anybody is promoting descent to lower unless on a published approach.
So yes you do need a decent ceiling for most DIY examples
Also Go around would be to continue on whatever VOR radial that you are tracking and buŁ$er off to the published alternate that you have planned and checked the weather for in advance (yes I suppose I am being a tad optimistic).