There is no "expiration" time for a wx ob. The ob reports the wx at the time it was taken. The NWS has standards for when a new ob has to be taken. You could have a "SPECI" report 2 minutes after the METAR if the wind swings enough, a thunderstorm starts or ends, the ceiling lifts or drops a given amount, etc. With an observer in place, it's implied that the reported wx is valid until a new report comes out. Without the coverage, you have no idea what the weather IS, just what it WAS.

And if VFR isn't legal for 121 ops, why is there a section outlining the mins?

It's just not legal for you, you don't have paragraph B51 in your OPS SPECs.

What's a Forecast Observation? If the current wx is at or above your minumums for the approach, you shoot it and see what happens. If you've got IIIb in you OPS SPECs, it's a IIIb approach and the plane and crew are good for IIIb, you'll never see the runway till you touch down.