Essentially, I'm wanting to create an Oauth Client as an App so I can get data from Dynamics for multiple customers. Does anyone know if this is possible to do in AppSource or do you know of another way?
I have a service that will be served in a cloud different than Azure so there really isn't anything for me to submit as an App and I really don't want every customer to have to setup their own App that gives my service the privileges/access it needs, but it's looking like I may have to.
It sounds like you'll want to register an app with Azure AD (the OAuth2.0 service/identity provider for work and school accounts), and create a multi-tenant app. Then you can configure this app in the Azure Portal to get permissions to the APIs the app wants tokens to call (in your case Dynamics or the Microsoft Graph).
Once this app is written, you can code up your app using one of the Azure AD Auth Libraries. Here's some sample code for a .NET web API. You can find more code samples on Github and search active directory. Moreover, the Azure Active Directory Developer Landing Page is a great place to look for more resources on doing all of this.