Your logic is not off but neither is mine. What I've stated is straight from Stephen's mouth and from the creators. They can't confirm or deny anything but they've told press their outline. Arrow is a 5 Season arch with two progressions taking place simultaneously. Each season we see 1 full year of Oliver's past life and we also see him take one step forward in his modern development.
When his past catches up to him he will be fully transformed from the s1 Vigilante, s2 Hood, s3 Arrow, s4 Demon(?). In s5 Ollie will become Green Arrow. Anyways, I don't get why anyone would want a solo continuation of Arrow when Justice Society is a perfect new chapter for Green Arrow. In concept it's just a HQ upgrade for Felicity, non-stop Brave and Bold team ups with big season finales, and some new show graphics. He shouldn't be a lone wolf when a super hero team is being formed around him in Starling City by Ray Palmer, using Arrow's allies as support.
As for precedent, CBS set one when they did a crossover with CSI and Without a Trace. Those shows air on CBS in America but rights go to different networks in other countries. They made deals and cross promotions between networks for the event. Famously, Detective John Munch from NBC's Homicide played by Richard Belzer has also appeared on The Wire, X-Files, Law and Order, Arrested Development, and a bunch of other shows. We're currently living in an age where Marvel has 4 Netflix series and a hit ABC series, with Sony's fresh new Spider-Man all married under the MCU.
Another precedent was set back in the Golden Age when JSA united the most popular heroes from All-Star comics with National Publications, who later merged to form DC comics. JSA was the very first superhero team up and it just so happened to be a cross-over event between rival publishers. It's history lends well to where the TV networks are presently at.
Surely when WB works out a deal with CBS, who then hands Supergirl over to CW's creative team behind Arrow and Flash, they want continuity options. Cross overs are all the marketing rage right now and not going anyway anytime soon. The president of CW would not deny that they are joined worlds. He said it wasn't likely to happen on Supergirl, but he also can't spoil shit. He then said Teen Titans could work in the Arrow/Flash universe, as a tease. WB and CBS stand to hold onto way more viewers by cross promoting and by sharing production values across the franchises. Gotham is on it's own because it's production and serial format is radically different.