Nintendo Switch theme injector 3.2.1 is out and now you don’t need those pesky DDS files. You can just take any 720p image and make a theme with it.
Custom layouts are now supported, plus there are a few built-in to theme injector but you can also make your own as well. To do that you will need other tools like qlynx and wexos, plus generating a json patch but the ones in theme injector should be enough for most of us. 😉
If you don’t have a Windows system you can always use the Switch theme injector website but you will need those DDS files again.