1. Quench distance as we discuss it, is the distance between the quench pad on the piston and the quench pad on the head, when the engine is assembled. Others call it squish distance, which might be more accurate, as the piston comes to TDC, the tighter that distance, the more it squishes everything into the chamber for a better burn and less area for an uncontrolled flame front to start
2. DCR has nothing to do with LSA or overlap. Remember, if you had overlap during compression, air would come out both the exhaust and the intake. Overlap occurs at the end of exhaust stroke and the beginning of intake stroke. Now, thinking of it that way, cams NEVER bleed off compression, there is no point where the valve dumps cylinder pressure.....that would cause a backfire through the intake or pop out the exhaust.
DCR uses intake closing point for it's calculations, as well as compression numbers and rod length. It estimates the compression ratio based on volume in the cylinder at the point the intake valve closes as compared to the volume when it is at TDC. Essentially, you cannot build compression when the valve is open, so the piston is traveling upwards not building compression, at the point the intake closes, that's where it starts. So DCR is "intake valve closing point adjusted" compression ratio
What a later intake valve closing point does is prevent the piston from making compression in the first place at the bottom of the stroke. THAT's what DCR is all about. That's why DCR is lower than SCR. Now, is it exact math? No because although it's called dynamic, it really isn't dynamic, it's just SCR adjusted for cam events.
3. So, you bring up some good points though. DCR is calculated by mechanical points as a method of comparison. The valve closes at a certain point as the piston is going upwards, that point, other than some slight stretching / tolerance shifting, etc is the same at any RPM.
HOWEVER, the reason you cannot merely use DCR to pick cam and compression is because there are times when a cylinder fills more than what mechanically is possible. It's called supercharging effect, and it shows as greater than 100% VE (and even if not over 100% in a less efficent engine, its an increase in VE at some different RPM) THAT happens due to a combination of effects such as header tube design, overlap, intake design, piston design, port efficiency, etc. At those points, which happen at different RPM depending on the build, the engine actually fills the cylinder more than DCR explains, and even more than SCR would too. So as you can see, haters of DCR, should also be haters of SCR discussion, because the effects in a running engine are the same, they are just static estimates
So, in the end, DCR is a good estimator when combined with other tools that the builder is familiar with. Also, it is also important to use the SAME estimating tool every time so you can start seeing some trending as well as the most important point... EVERYTHING has to be measured Once one DCR variable (or SCR for that matter) is estimated, the results are meaningless for comparison
Hope that helps