My dentist tells me that I need a crown. The tooth is worn down (due to grinding I think) and there is not much for the crown to hold onto. She proposes crown lengthening, removing some of the bone etc. I wonder if an onlay might be an alternative. The issue must be whether there is enough for the onlay to hold onto. Is less of a problem with a cerec onlay?

I believe you would have the same problem with the cerec. Crown lengthening is a common procedure for situations like yours.