External storage is technically viable, but then it's yet another device and yet another cable contributing to the unholy mess on your desk. If there are no functional reasons to have an external device, it's just better to have an internal one.
I haven't found any Thunderbolt 5 enclosures for sale yet, though.
Even thunderbolt 4 hubs are few and far between, and mostly dissapointing
The speed difference between doesn't matter for disk speeds though. Absolute top speed is 3 Gbps per chip, so even Thunderbolt 1 should max out 2 chips, with it's 10 Gbps transfer speed. Thunderbolt 4 should max out more than 10 NAND storage chips.