Sam,
We only support off-boxing the Portal DB if you are using 'MySQL Cluster', which would provide high availability for the database. But if you are using our out of the box 'MySQL Enterprise' edition, we do not support off-boxing the DB. This should remain on-box.
*** Please note the difference between 'MySQL Cluster' and the clustering of multiple 'MySQL Enterprise' servers. 'MySQL Cluster' is a separate product line.
In regards to the lrs vs lrsdata: the lrs database contains things such as Applications, Orgs, Users, Keys, and more CMS information whereas lrsdata is all about the metrics/analysis of it.
I hope this helps!
-Alec Daniello
APIM Support