One of the questions I always have about Lwaxana regarding Picard and Odo is whether she was actually incorrect in her telepathic understanding of their feelings about her.

Well i think i recall a DS9 episode where she admits she cant read changelings minds, so Odo she cant read.

That said..I cant recall if i saw this in shitty daystrom, or if it was a dream. But i have a theory that Picard was unusually resilient to telepathy and able to override emotions above all else for the job. Riker was a horn dog, so no doubt she knew he was honking his horn to her daughter from day 1. But Picard was always a company man, and being a cue ball, probably into some more mature women.

My theory is that she knew the man had some kinks in the closet and likely kept some memories of Lwaxana in his spank bank when wondering what could have been. She picked up on it and decided to fuck with him incessantly throughout the show for it, knowing full well he was a trained company man and would never give into emotions like that, at least when stone sober. But she knew what he whipped it to in the sonic shower, he knew she knew and it became the most dangerous game of chess of him trying to make sure she didnt just blurt it out, while playing icarus and riding as close to the twin stars of her bussom as he could to store it in his spank bank without crossing the line.

As for Odo, i think she couldnt read it (again I think i saw it in an episode) but was able to seduce him to get that changeling d, which she encouraged him to "change it up" to be of a perfect fit. And thus, became quite enamored with his graces.

Those are my running theories.