External hard drive issues and unable to update OS

Hi All,

I have a 2015 iMac which is currently running Catalina. Although it has been working fine up until now, all of a sudden my external hard drive is not showing up and I am unable to update my OS even though it says it is available for my system. I have a brand new hard drive with all my files on so there is no issue with the external drive itself. When I open disk utility, it is showing in there but I am unable to do anything with it.

When I try to update my OS to either Big Sur or Monterey I am receiving this from the app store...

Basically all my work files are on my external hard drive and I am at a loss on how to rectify any of this. Any help would be much appreciated or some tough love on if my current iMac is just past it now >_<