Does my tier 2 need to have readable content? can they just be spunned at 70% uniqueness and not readable?
Only the tier 1 links need to be high quality, the rest of the tier can be pure spam, but the higher quality they are the better your link pyramid will be.
You should use fresh content to get maximum benefit, create your blog on web 2.0 sites with quality thinking it is a real blog then your won't find any problem in indexing and your content would get some traffics too.
Google is getting better at detecting overly spun content. This is especially true since Google Penguin 2.0. And, since it's against Google TOS to use spun or nonsense content in an effort to manipulate search engines and gain better ranking, you have a risk of having your blog or site banned if it's getting links from spun article sites. If your main site is very important to you, then it's worth the extra effort to personally create good quality content (or pay a writer to create posts/articles), even if just on your linking sites.
I use KontentMachine for my tier 2 and it works really well. The content it generates won't win prizes but it definitely gets the job done.
Readable content is always preferred in my experience. Although, it doesn't matter THAT much, but you should take every natural look for your links that you can get.