Unfortunately I don't think it's possible. The router can only intercept as far as DNS goes, and DNS Blocklists are already incapable of blocking YouTube ads.
Routers run operating systems like everything else does though. What would make my OpenWRT router running this any different from another device on the network?
The service doesn't deal with encrypted payloads. It just integrates with YouTube's lounge api. As long as a machine is able to run this and is connected to the internet, that should be enough.
[1]: https://help.mikrotik.com/docs/display/ROS/Container