Is AirTag good for a older iPhone

In addition to Ferd II's post - and to answer one aspect of your question prompted by your older iPhone XR - iPhone 11 models or later are equipped with the Apple-designed Ultra Wideband chip. See Ultra Wideband availability for a little detail.

This feature will allow these iPhones to direct the user to a nearby AirTag and is explained in Find your keys, backpack, and more with AirTag - Apple Support. Your older XR however is not equipped with the internals required for this precision finding tool, but in all other regards works with AirTag (with iOS 14.5 or later).

According to AirTag - Apple:

System Requirements and Compatibility

• Apple ID
• iPhone and iPod touch models with iOS 14.5 or later
• iPad models with iPadOS 14.5 or later

This was a personal discovery! Some family have gone for a holiday overseas equipped with shiny new AirTags in their bags. One daughter has an iPhone XS which, to her dismay, does not have the arrow and distance in metres to locate her AirTag, features which do exist in her sister's iPhone 12. At least they're travelling together. She can't really complain - the AirTag was an early Christmas present.

Thanks for the extra details!