iMac 2010 as monitor for MacBook Pro 2015 and as a sort of NAS host

Good morning lovely clever Mac types. I'm after a bit of advice if I may.

I have a trusty iMac (21.5-inch, Mid 2010). I got it upgraded to an SSD when the original HDD went pop last year.

I use it as the main computer for all the home admin, financials, and photo storage and backup. There's a 5TB external drive for storage, and a 6TB drive for Time Machine.

My router (AmpiFi home mesh) apparently won't allow an HDD to be connected.

Since Catalina came along though, the iMac has stopped being as useful as it's stuck in High Sierra. It would probably be better if none of the iCloud features worked, but it seems sporadic, and I'm worried I'll miss something or save an earlier version over the top of new work in Notes / iCloud / Files or something.

I know I can use the iMac as a monitor for my 2015 MacBook Pro with a MiniDisplayPort cable.

I think I can use the iMac as a sort of NAS host for the 5TB storage HDD (I'm sorry, I'm not technical, that's probably a horrible way of describing that setup but I hope it makes sense) as I can currently connect to the iMac with my MacBook Pro over WiFi and access files on that external drive.

My question is can I do both at once? If I connect the MacBook Pro to the iMac with a MiniDisplayPort cable so that I can use the iMac as a monitor, will the iMac still connect to the home WiFi in the background and allow the MacBook Pro to access its internal and external drives over the network (I know it can't access them over the MiniDisplayPort cable).

I hope that makes sense, thanks ever so much for any help you can offer. Have a lovely day!