My preference is always to use an external drive because it’s easier to transfer music, and it may be used for your Roon backups. Incidently, this doesn’t need to be an SSD: HDD are perfectly fine for your library files.
Boot drive can be as small as 128gb but hard to find M.2 nvme drives that small…it’s only used for roon os and roon database anything bigger is wasted space.
16gb ram should keep you out of trouble for anything under 500k tracks probably