Would this still work, get traffic if i was to use the one domain and just create sub directories for each niche. e.g celebrities.eblogging.com, randomniche.eblogging.com (not my domain, just an example)
or would you recommend a new domain for each niche?
I would say get super creative but still try to stay somewhat on topic, for instance try to go a bit broader of a niche like blogging instead of wordpress, then you can have domains about all types of blogging like blogging.wordpress.com ect.. but this also brings the challenge of finding a proper domain for it.
Basically its all about getting as much pages indexed as possible and getting the most click possible while having enough content on your site to get around Google's Smart Ad System.