That's basically what I did in my last Lubeck game, yes. IHere's my experiences:
A friendship with the Emperor is very valuable as for any HRE game, since unlawful territory is annoying, and doubly so for the high-development provinces you're going for. It's also useful because Denmark will very likely come knocking at some point, and when it does, you really want the emperor to help you out. It's also a great opportunity to take a province or two. Keep a very close eye on the Swedes. Muscovites may or may not be a factor in your neck of the woods.
I would think about Brandenburg and the Teutons, since both are fairly close to you, but far enough away that they aren't relevant to your initial expansion: Consider allying one and beating up the other, depending on whether your interests lie on the seas or inland Germany (A maritime Lubeck should beat up the Teutons for Danzig at the minimum, while a more land-based, german Lubeck should probably aim to take Berlin). Be mindful that both are stronger than you at game start, but should be relatively equal after your initial burst of expansion. Be careful that you don't let either consume Pomerania if you plan to go that way, as at least Brandenburg gets a mission I think. If your chosen target is on the business end of a nasty war, be opportunistic and swoop in (this applies doubly to Denmark, but don't get caught alone in a war with them).
Also, the fate of the HRE opms are important to you, so keep an eye on them. I lost a lot of trade power when Frankfurt got gobbled up, for example.
I went for Economic-Defensive, since early morale is wonderful, and for a tall game Economic can't be beat. I also found myself being sieged fairly often due to my lack of defensive depth, so Defensive helps keep the forts up. Trade is nice as well, but I'd take that later when you have more weight to throw around.
Finally, there's a neat event that happens sometimes when you elect a new ruler while at 0 or low stability (sometimes? I don't think it always triggers), which allows you to pick between three pretty awesome 10 year modifiers. Worth knowing about.