This was way more confusing than it had to be.
TL;DR: You can lend your digital games to friends & family for 14 days, but both consoles need to connect locally to enable this…(?)
You can’t play digital games you’ve lent out during this time. I guess the point is making it similar to giving your friend a physical game cartridge.
you should be able to use games within your family completely unlimited anyway.
I would understand the local connection requirement if that was for sharing with people outside your family. that would make it similar to sharing a game with a friend you know in person. without that the floodgates would be open to sharing games with literally anyone online.
How would you make it so you can only share games with your family? As in what technical definition of “family” would you use that can’t include your friends?