I used to collect music until one day I lost everything (it was all on one harddrive) - these days I just keep the stuff that is now rare / cannot be found anymore.
If I know even the average largest music libraries are ~1TB I will gladly buy two 1TB drives and begin collecting and buying music again.
My "sorted" folder is what I sometimes listen to, and music that I collected or assimilated out of my own interest. That's 139G, containing ~18k files in ~2k folders. This includes about 500 flacs, the gross remainder is mp3. I try to get 256 to 320kbps these days, true stereo. My old collection started in the days of slow internet and 128kbps joint stereo (and sometimes even 96kbps), hence the massive difference in size.
My "unsorted" folder is an additional 266G with 35k files (60 flacs) in 4400 folders. This is mainly collections I got from friends and contains stuff I don't regularly listen to, and for which I have not yet checked the quality. Probably also a bunch of duplicates.
1TB sounds fair, though I'd go with a RAID1 of 2TB drives just to be sure. I wouldn't bother with SSDs, but if physical size matters check out 2.5" HDDs.
TBH, most of the time I just use tidal; unless I want a something that's not on there (or some specific version).
Occasionally synced SSD kept at parents/friends' house solves both. In the old times it was (somewhat) costly and (somewhat) clunky, but with 1TB M.2 drives I'd consider both problems to be solved - and drives are only getting cheaper.
Also: let's not pretend that cloud services are more reliable than something you own. They aren't. iTunes sometimes stops playback midway with some "URL not found" error; songs disappear due to copyright reasons, and let's not pretend iTunes - or any other service - will not get phased out eventually, taking your entire library with it.
I'd say we're well into the territory where a respectable music collection doesn't occupy an appreciable amount of storage. A $30 flash drive would fit MP3s, a $150 SSD would fit FLACs. The challenge is managing multiple copies, but these sizes are even small enough to be practical for cloud backups.
[0] 128k CBR it seems? I forget. I used to use this for devices that didn't support FLAC natively, and when storage was smaller. I should probably either upgrade the quality or just zap it.
A CD can hold 700 MB of data. 1 TB will hold 1428 full CD images. Of course, not all albums fill the whole CD, so it'll be even more once the audio is extracted to uncompressed audio files. That's already way more albums than I listen to on Spotify.
Then add some compression: my rule of thumb is 10x for mp3 and 2x for flac, but that may be a bit optimistic. Even assuming a low compression ratio of 1.5x, that leaves us with more than 2100 full albums.
I don't think I will ever listen to that much different music.
And Spotify doesn't even have the good version of my favorite Robyn album, and Kyle Gass Band only just reappeared after missing for months. Maybe I should start a collection, too.
BUT I still have about 100G of music of varying organization and bitrate.
FYI, AWS Glacier Deep Archive (disaster recovery, cold storage) costs $1.00/TB/month - so if you love your data and want to make sure a fire or drive failure doesn't bring you down, I recommend using it.