SSD drive too small for MacOS Big Sur?

No one knows what the future will bring.

Some things to keep in mind:

1. Apple has updated security for each upgrade that is two releases past the current. - I.e. Big Sur, Catalina, and Mojave are the only ones currently maintained. Once in a blue moon if a really bad security flub happens they'll release an update for something earlier.
2. http://www.malwarebytes.org and http://www.avast.com have maintained current security software for 10.8 and later to find malware and viruses. While not covering everything, they are catch most things that can affect your machine.
3. https://discussions.apple.com/docs/DOC-250002463 Etrecheck is a software which offers detailed feedback about background running software that most experienced readers on this board can tell you if they need to be removed to maintain a safe system. It is available for 10.6 and later.
4. https://discussions.apple.com/docs/DOC-250003586 Browser currency for security is available for every Mac OS X release. and many older releases. Safari is only maintained as far as the updates in #1.

The problem is with large files fragmenting data.

Backup all your data to an external drive using a clone on two different drives.

Use internet restore (command-option-shift-R) to use Disk Utility on View -> Show all volumes to erase first as HFS Extended Journalled, and then APFS.

Then install the OS.

Then upgrade to Big Sur if you must have Big Sur.

You can remap the Pictures and Music folder using hard links:

https://support.apple.com/en-gb/HT201517

https://support.apple.com/guide/music/change-where-music-files-are-stored-mus69248042d/mac

You don't. You need to free up more space.