Atomic layer deposited (ALD) YO thin films have been thoroughly investigated for optical or electronic applications. The coherent spectroscopy of lanthanide ions doped into this material has also recently attracted increasing interest in the field of quantum technologies for which they are considered promising candidates in quantum memories or as spin-photon interfaces. However, these most demanding applications require a deep control over the local positioning of the ions and their close environment in the crystalline matrix. This study focuses on the structural as well as optical properties of Eu and Er dopants in YO using photoluminescence (PL), luminescence decay times, and inhomogeneous line width (Γ) measurements within this particular context. While as-grown ALD films do not provide an ideal host for the emitters, we demonstrate that by optimizing the deposition conditions and using appropriate annealing post treatments narrow inhomogeneous lines can be obtained for the F↔D transition of Eu even for nanoscale films. Furthermore, about 1.5 ms lifetime has been measured for the infrared telecom transition of Er in ultrathin films (<10 nm), which is an order of magnitude higher than in nanoparticles of the same size. These results validate optimized rare-earth-doped ALD YO films as a suitable platform for photonics applications where few-nanometer-thick films with well-localized emitters are mandatory. This approach provides the first building blocks toward the development of more complex devices for quantum sensing or hybrid structures coupled with other systems such as two-dimensional materials.