Sorry about the delay as I wanted to ponder my response a bit to separate out what I would do versus what you should do since data recovery of a failing device also requires some intuition from noticing the tiniest things. Every failing device is handled a bit differently depending on what is seen in addition to the severity of the failure.
Like I mentioned before the safest option would be to have a professional data recovery service such as Drive Savers attempt to retrieve the data. They provide free estimates and are recommended by Apple and other OEMs.
The drive failure is just beginning, but it is also starting to get enough bad blocks that extreme care must be taken. Currently in the report there are 18 blocks pending reallocation. These 18 blocks will be ones which will cause problems with transferring the data, plus any other bad blocks which have not yet been marked for reallocation yet (the latter unknown bad blocks are the biggest concern). Already 19 blocks have been reallocated and are no longer a concern except for the fact that we know at least 37 blocks have already gone bad. And the report shows some uncorrectable errors which mean some blocks will have data loss. A lot of things go into determining whether to try using the Finder, or some other macOS app to attempt to transfer files to external media, or to first perform a low level bit for bit clone. Also a lot of careful observation needs to be done throughout the whole process as well as monitoring the drive's health to see if the failure is getting worse and how quickly the failure is increasing.
If you just need to recover a small number of extremely critical files, then it may be worth trying to use the Finder or the third party app Carbon Copy Cloner to attempt to transfer a small number of critical files. CCC allows you to select just the files you want to transfer and if it starts to have errors CCC will prompt you if it should skip files which start to produce errors (yes), however, if this transfer is taking too long, then it should be aborted immediately so as not to make the drive failure worse.
If a large amount of data (large size files) need to be transferred, then performing a low level bit for bit (block for block) clone is best. However, this requires using a special command line utility best used from a Linux boot drive since macOS interferes with the process and does not have a precompiled binary version of the utility available. Even if you are familiar with the command line, it is very easy to make a mistake in marking the source & destinations of the clone. When performing this clone you must usually make a decision on when it stop it since there will usually still be blocks that has trouble transferring. Those blocks may be empty space, or contain OS system files, but they may also contain your actual data file....there is no way to know and no one can really advise you on when to give up on the clone.
After you decide the cloning has gotten as many blocks as possible, you will need to see if you can access the clone normally. Sometimes you may need to run Disk Utility to repair the file system, while other times you may need to use a standard data recovery app to locate your files on the clone. It is important to realize, that once you attempt to access the clone, then you will not be able to resume the clone because macOS will likely have made some changes to the clone and resuming the clone will further damage the possibly already damaged file system. I can provide some instructions if you are interested. I have posted them on these forums several times many years ago, so I will likely try to find one of them to link here which may take a bit of time to locate since they were difficult to write up the first time and I haven't performed data recovery in a few years so I'm a bit rusty when trying to provide the specific details to guide you.
The cloning method requires another drive the same size or larger than the failing drive. You will also need yet another drive with sufficient space for storing the data recovered from the clone. You don't want to use the clone for more than accessing the files since you cannot be sure of the integrity of the file system or the OS on it (if it happens to bootable).
Sometimes I may employ both methods on a drive such as this if someone had a few critical files. I would try to pull just those specific files first. Then depending on the importance of the remaining files and the amount of data, and the health of the drive I may continue attempting a standard file transfer, or I may employ the cloning method. It is a very delicate balance with no guarantees on any method and no way to know which path is the correct one until after it is done.
You do have a very important decision to make because you usually only get one chance at recovering data from a failing drive. So be sure to choose wisely.