Recurring was better than a regular, I think, in that his appearances are more special.
I sort of agree but any Garak is worthwhile Garak. The only "wasted" Garak appearances were the ones where he only got one scene but he still managed to steal the show regardless of the limited screentime

In lieu of, or in addition to, Worf?Apparently they wanted to make Garak a regular in Season 4 but the studio put a stop to it.
I'm unsure. Probably in lieu of Worf. The studio should have downgraded Jake Sisko to recurring status since that's pretty much what he was anyway and promoted Garak to the main cast along with Worf.