Message 01 or 02:
Whoever setup the Synology DS118 NAS drive for you & your daughter,
you should contact that person,
to arrange time to do config/settings changes,
& setup another SHARED FOLDER or another SHARED DRIVE/PARTITION inside the NAS drive,
with a new shared-name.
If you or your daughter, is able to able to do that, then you should do these steps together.
To use NAS drive also as a TimeMachine backup,
I will just use "person", to indicate You/your-daughter/that-paerson, who will work/configure these.
This person will need to go inside your NAS drive, & your daughter's NAS drive,
either via a direct/physical presence/keyboard,
or via a remote/internet connection (temporarily enabled inside NAS drive to configure, Do not forget to turn this temporary access OFF when config is done inside the NAS drive).
Then, that person wud need to RESIZE or REDUCE the size of, one of the existing partition inside NAS drive,
so that a new partition can be created for TimeMachine backup.
Strategy of creating new partition should be this : if your Mac computer's internal drive is 1 TB in size, then new partition inside NAS drive should also be atleast 1 TB in size.
Another way is, REDUCE the specified earlier SIZE of one of the existing shared-drive or shared-folder, inside the NAS drive settings, by 1 TB, if your Mac computer's internal drive is 1 TB.
I mentioned in above, both "partition" or "drive" based way , and also "share-folder-size-change" based way, ... because i dont know how you/your-daughter/that-person had setup earlier shared-folder / shared-drive inside your or her's Synology NAS drive.
After reducing existing one of the shared-folder or existing one of the shared-drive inside the NAS drive,
then that person wud need to create a NEW shared drive or new shared folder in the new empty or in newly available space,
which then can be accessed by using a new SMB resource URL, from your Mac computer (or windows computer or phone etc).
Find out your mac computer's internal/entire "Macintosh HD" drive's full size, by using "Disk Utility" software.
You said your mac drive is 500 GB.
EDIT :
i just found out, synolgy NAS drive/software does not allow existing drive's size reduction from their device UI webpage !!
https://kb.synology.com/en-global/DSM/tutorial/Shrinking_existing_volume
So 1st Buy/Get external USB drive (2TB) , that has storage capacity size same or higher than your synology NAS drive, you said your NAS is 2TB.
Connect your synology NAS drive's USB port/cable directly into your Mac computer, if necessary load synology software.
Use disk CLONING software, to clone NAS drive into the new USB drive.
See my earlier post here, & search for "Disk Cloning" in that webpage.
After you've done backup of your very important earlier all data in NAS drive,
then will need to RESIZE the partitions inside the NAS drive,
So you will need PARTITION handling / management software, that can reduce partition size (by 500 GB), from macOS.
Earlier mentioned "Disk Cloning" software may-be or should-be able to do this (partition handling) on synology drive (if they were also able to CLONE the NAS drive),
or, Get one of the macOS Monterey compatible & specialized partition handling software mentioned here & here,
you may need to contact partition manager software devs & ask, if itheir software can handle synology NAS drive from macOS Monterey.
Once you get such partition handling software, run that, that will be able to resize one of the partition inside your NAS drive, for you,
Apply this resize strategy : reduce NAS drive's one of the partition by 1TB , when your mac computer's internal drive size is 1TB , or , reduce a partition by 2TB if your mac's internal drive is 2TB, & so on.
Then detach NAS drive's USB cable, go inside NAS drive config page in NAS drive via WiFi / LAN connection, and create another partition for TimeMachine usage purpose.
By the way, if your NAS drive does not have sufficient space, to hold both your earlier "genealogy" data, and TimeMachine's required backup size , then you will have to change internal drives, inside the NAS drive, with other large size drives.
So for synology NAS drive related works, you will need to go to their/synology's community forum, or Contact their tech support directly if your synology NAS drive is within valid warranty period, & ask them to advise you on your need.
After above steps,
follow the rest of steps mentioned in next "Message 02 of 02" , here, in this page.
More info: