Having worked on a rating system, I think 10 levels are useful (or 5 levels with half-stars). You can create better averages/recs using 10 levels, since ratings of 0 or 10, which are often spammy, can be down-weighed.
I once had an interesting conversation with my mother in law who was telling us about how much thought and effort she puts into scoring shows on IMDB. She was shocked to learn that I want my opinion to have more impact, so If I like a show I give 10 and if I didn't it gets 1.
I can absolutely understand that it makes sense to have a much more fine-grained average, but personally I struggle to give meaningful ratings beyond the four I mentioned.
That said perhaps multiple binary dimensions would be better. Good story yes/no, interesting/unique premise yes/no, overall good acting yes/no, good cinematography yes/no etc etc.
I was interrupted, so when I picked up my brain continued with movie recommendation mode, I watch more movies than read books, but the binary multi-dimensional rating could of course be applied to books as well.