Replacing NUC HTPC with Mac Mini, Virtualization advice needed

I have a Windows 10 NUC as a server/Home Theater PC. I'd really like to dump the NUC and replace it with a Mac Mini. Many of the programs I use have Mac versions, but I'd like to run both Mac OS & Windows- there are quite a few Windows-only apps I want to use.

I don't have much experience running Windows on a Mac. I have a 12TB external USB drive with all my files and I'd like both Mac and Windows to have seamless read & write access simultaneously.

It seems that running a Windows virtualization on an M1 Mac is possible with Parallels or UTM, but it has some limitations. Is it better to use an Intel Mac with a Virtualization program, or with Boot Camp?

And what format should the external drive be? Currently it is NTFS.

thank you!