Virtual libraries use searches to define their content. A valid search is "ondevice:true", but that search itself will change depending on the device's content.
Any search you can create in the searchbar can be used as a virtual library.
One thing you can do is add tags to arbitrary books and use that as a search.
Or if all the books that belong to a Virtual Library share some identifying metadata, you can use that.
You mentioned books and their read status. There is no definitive way to deal with these, but generally people do one of two things:
- Create a boolean custom column that can be True or False
- Add a tag, e.g. "Already read".
Either one can be searched for.
EDIT: Or Reading List PI.