SOLVED: Clearing the cache and data in the Yahoo Mail app did the job. I tried clearing cache only before, but this time also clearing the data fixed my problem. Thanks for the suggestions.
The options presented in the notification bar are dependent on your "swipe options" within the Yahoo app. If you change one of those to "mark as read", you will have the option to do so in the notification bar as well. [I have attached photos on how to do so]
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