Database Modelling / ER Diagram - Should Look-up tables be left alone as a separate entity?

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I'm trying to create a DB that can manage/record sightings of many differing machinery types, be it Cars, Buses, Trucks, Boats, Trains, etc. which will also record all the characteristics of such a sighting [which would obviously vary greatly: colour, hull type, vehicle model, etc., etc.] and where the sighting occured.

Here's my confused ER- diagram. enter image description here

Where I'm getting confused, is, how would/should I go about recording/referencing the pre-defined characteristics [found in the characteristic's table] in the Item_Observation table, as I would have to create another many-to-many table to hold such, but feel i'm not implementing it very well due to table duplication somewhat? But then I feel - I'm not 100% sure why - storing the observed characteristic's data in the look-up table iteself, is also not a good idea?

enter image description here

Which begs the question, should Look-up tables be left alone as a separate entity? And probably more to the point, is it my schema that's completely flawed? If you haven't already guessed, I'm certainly no DB designer. Thanks in anticipation, cheers Dyr

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You are modelling a DBMS's metadata design, but not your application.

See these two posts' questions and answers.