In this paper, we propose a novel preheating treatment (short-time annealing + aging) to generate a reticulated structure comprising long-period stacking ordered (LPSO) and β’ phases. The evolution of secondary phases, dynamic recrystallization (DRX) mechanisms, and texture development during hot compression were systematically investigated. Results indicate that β’ phase dissolution and stacking fault formation in deformed grains at the initial deformation stage effectively hindered dislocation motion. DRX initiated at triple junctions, while dynamic precipitation was absent at grain boundaries, suggesting that DRX precedes dynamic precipitation rather than occurring concurrently. Grain refinement in pre-aged (S0) samples primarily resulted from continuous dynamic recrystallization (CDRX) and particle-stimulated nucleation (PSN). In contrast, pre-annealed (T1) and pre-annealed-aged (ST1) samples exhibited grain refinement through discontinuous dynamic recrystallization (DDRX), PSN, and kink band nucleation. The abnormal texture was attributed to deformed grains with < 0001 > orientation perpendicular to the compression direction (CD) and lamellar LPSO phase alignment perpendicular to CD, which induced slight kinking. Suppressed DRX was linked to reduced intragranular dislocation density. This work establishes a microstructure-property optimization strategy by controlling lamellar LPSO phase orientation, offering critical insights for designing high-strength and ductile Mg-RE alloys.