Hey @MatthewFB,
Never worked with Smartcards before but I've worked with some USB passthrough devices. Of course this will depend on how Yubikey works (which is very specific and I am not familiar with).
I just checked on internet that this Yubikey is a smart card key which is connected to the client computer. First of all is important differentiate that the Smart Card as a 2FA for vCenter is different that login into the VMRC console. However you can use it for both.
For the vCenter 2FA setup you need to follow the steps in the next section: https://docs.vmware.com/en/VMware-vSphere/6.7/com.vmware.psc.doc/GUID-08DF3B90-85C6-4CBB-B87C-CEF380...
Once you accomplish that setup you need to follow the steps for doing the passthrough of the USB key to the virtual machines you are trying to connect which is pretty straight forward as the VMs have a USB Controller by default. Check in the next page if the USB controller the VM has is compatible with the USB version of the key: https://docs.vmware.com/en/VMware-vSphere/6.7/com.vmware.vsphere.vm_admin.doc/GUID-EC20F765-4C1A-4D0...
After doing just follow the steps that appears in the next section:https://docs.vmware.com/en/VMware-vSphere/6.7/com.vmware.vsphere.vm_admin.doc/GUID-879E3BDF-460A-454...
NOTE: take into account that this does not work from user, you need the VMRC application for it to work to be downloaded (this answer the question you did on second paragrapth). Maybe the users are not allowed to have the VMRC application but maybe this is something you would like to review.
