You can move that library where ever you want, and there are a fair number of people that do. Daz looks for libraries that are specified under edit/preferences

Click on the content tab at the top, then the content directory button at the bottom. This brings up the dialog that lets you place the libraries. As I said, you can add as many as you want. If you move the base library you should also change the DIM path to match so new stuff goes where you want it.

As to why you would do it, these libraries get large, and often crowd the C:. In addition more people are using SSD's for their C: and these tend to be smaller. In any case I have a 3 TB drive I devote to the library that isn't the C:

Now as to why you would want more than one content library, that depends on your use of the program. If you add in content from other places and something goes wrong DAZ will be unable to help you. Particularly if something messes up the Gene pool for genesis whatever. Also most items you get outside of DAZ do not have smart content entries, you either have to make them yourself, or organize them by directory. I move Rendo items around freely.

Lastly, if you ever start making content yourself, or beta testing for somebody else, it is wise to put those items in their own library for testing so they are self contained. It's hard enough keeping track of revisions without having to search your main library for the files.