Is this a valid argument to prove the claim? I put in bold the part I am doubting the most:
If a graph has no $K_{4}$ or $K_{2,3}$ subdivision then it is outerplanar
Suppose G has no $K_{4}$ or $K_{2,3}$. Add a vertex $v$ to the exterior face of $G$ (outside of $G$) and connect it to every vertex in $G$. Call this graph $G^{\prime}$. Assume $G^{\prime}$ is not planar and by Kuratowski theorem contains a $K_{5}$ or $K_{3,3}$ subdivision. Therefore $G$ must contain a $K_{4}$ or $K_{2,3}$ subdivision, as every $K_{5}$ subdivision contains a $K_{4}$ and every $K_{3,3}$ contains a $K_{2,3}$ subdivision. However, by assumption $G$ does not have a $K_{4}$ or $K_{2,3}$ subdivision, hence we have a contradiction. Hence $G^{\prime}$ must be planar. As $G^{\prime}$ is planar and $v$ is exterior to all of $G$ and adjacent to all vertices in $G$, $G$ must be outerplanar.
First, you begin by adding vertex $v$ to the "exterior face of $G$", and later using the fact that $v$ is "exterior to all of $G$".
This is not okay, since at this point, we don't know that $G$ is planar, and don't have a fixed plane embedding of $G$. Even if you invoke Kuratowski's theorem to say that $G$ is planar and pick a plane embedding, it might be the wrong embedding for us to use later! We will prove that $G'$ has a plane embedding later on, but that plane embedding might not be compatible with the plane embedding we picked for $G$.
(Note also that even if $G$ is outerplanar, not all planar embeddings of it are outerplanar embeddings. Some embeddings might have all vertices along a face that is not the exterior face; others might have no such face at all.)
So in the first step, all we can do is say "contruct $G'$ by adding a new vertex $v$ adjacent to all vertices of $G$". This will be fine.
To justify the bolded step, consider a subdivision of, say, $K_5$ in $G'$.
The same argument works for $K_{3,3}$.
We have to be more careful with the last step: just because $G'$ is planar, can we conclude that $G$ is outerplanar?
Let's take a planar drawing of $G'$. Deleting $v$ and all its edges gives a planar drawing of $G$. Let $S$ be the subset of the plane where $v$ and all its edges were embedded. Then
So we have an embedding of $G$ where one of the faces contains all the vertices. If it is already exterior, fine. If not, we can invert the plane about a point contained in this face, and get a new embedding of $G$ where it is the exterior face.