Is your lan and wlan in the same network bridge?
You hostapd config files does not have something like bridge=br-lan but your initial wifi config does define option network lan. Does lan exist?
I don't see a hostapd.conf. Is this something I need to create myself? What goes into it?
Or do you mean /var/run/hostapd-phy0.conf ?
Yes this one... Is generated through s script from your wireless config file...
In /etc/config/network you should have or something similar:
config interface 'lan'
option type 'bridge'
option ifname 'eth0'
option proto 'dhcp'
And your wireless config should have:
config wifi-iface
...
option network 'lan'
This means your wifi ap and your eth interface are in the same bridge for your lan (br-lan)...
Many thanks for this, it's working now!
I commented out the 'bridge' before because I didn't understand it. OpenWrt is such a good learning tool for networks. i may even try setting up a VLAN next. 
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@balanga look here also if you wanted to setup a mesh with 2 or more Raspberry Pi's
That wireless dongle of yours support mesh (you need 1 for each Raspberry Pi)
The LibreMesh runs a wizzard at first boot to create AP and Mesh
https://downloads.libremesh.org/dayboot_rely/17.06/targets/brcm2708/bcm2709/Default/lime_default/lede-17.01.2-lime-default-brcm2708-bcm2709-rpi-2-ext4-sdcard.img.gz
take note of the download location above for correct image for your pi version board
bcm2708 pi1
bcm2709 pi2
bcm2710 pi3
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