Flywheels are designed to be machined. I have machined mine 4 times now and it has been lightened as well. They have plenty of meat on them to do so. The factory flywheels are fairly strong so many people like to retain them instead of a lightened one as the lighter or thinner the flywheel, the more prone it will be to warpage.
Factory flywheels are not case hardened, they are cast iron. The flywheels that are difficult to machine are the rotary ones which are made of steel. They must be done on a lathe or special grinder.
Cracks in the face mean shit. You can machine the flywheel flat, still see cracks in the surface and it will never cause you any problems in a million years.
I am not sure if all of the above applies to every car on the market but for skylines at least, it does. I have machined a few hundred flywheels this year and about 30 of them were skyline. Of them, none of the factory flywheels were a throwaway. I have been sent 2 lightened ones and 1 of them was a throwaway due to excessive warpage.