The "rich" indication is a good thing ... in relation to stoichiometnric (14.7:1). At WOT the mixture is supposed to be richer to provide cylinder cooling and enough fuel to make power.
As far as O2 readings ... as Bruce said, it's not an exact science, but it can be used as a gauge for tuning to make sure you are "in the ballpark". EGT, fuel type, sensor type, wiring, etc. can all affect O2 sensor readings.
I find with my car, it "likes" 730-740mv on 109 octane VP "Blue" and 1500 EGTs. On a really "good air" day, it needs 750s to not tickle the knock sensor.
On the chassis dyno several years ago, it made best power with those numbers too. I should learn some more soon when we put my motor on an engine dyno and play a bit too.