We've had a spacecraft in orbit around Earth for a quarter century with many astronauts having years of experience up there, including long duration stays of up to about a year. The idea that we can't do space with duration is silly.
We do not have any examples of space orne and isolated systems supporting human life for months, especially beyond the magnetosphere.
Providing food and other necessary resources for a long stay would not be especially difficult, but there's no need for it, and that leaves more volume to store other stuff.
The ISS, despite being a 'station', is very small with a pressurized volume of about 900m^3, about 100m^3 less than Starship. The linked capsule design also means the real usable volume is substantially less.
They know darn well that we're simply not ready to sail into deep space. Radiation shielding, orbital manufacturing, computer autonomy, peaceful nuclear use, etc. Lots of needed hypothetical technologies, or requisite trust and social stability that allows for the use of those technologies are missing. They couldn't even get to work on it in some of domains.
We in the public all knew about that wall by the 1980s: the anime Mobile Suit Gundam(1979) literally begins with a space habitat declaring independence and creating a Bay of Sydney in Australia by gassing and throwing down a resisting habitat with a reverse swing-by at the back of the Moon. It's all overblown plot for a work of fiction, but also something everyone knows will happen eventually that no one has response strategies for.
So as the immediate "path forward", NASA put up a boathouse next to a small lake near the ocean under the pretense that long-term researches of effects of lakewater on human body are to be conducted, using surplus Russian cargo ships. We know what happens if we did row into the ocean with the boats we have or can launch from Earth, we die from radiation. They're not conducting researches, they're just trying to keep the boat makers alive until we sort out the trust problem needed to work on the work to follow.
Not a lot had changed on that front in the past few decades, other than that the aforementioned weak trust had started collapsing very recently. No way the world is going to trust the US with NERVAs and Lunar shipyards under the current circumstance.
And yet Mars is the next logical step - not the Moon. The Moon's total lack of atmosphere, lower gravity and extremely long day, coupled with its pesky regolith make it an environment far harsher than Mars IMHO. Worried about the cold on Mars? Think again - lunar night is equally cold, and it lasts two weeks. During that period, human survival depends on two weeks of continuous heating power.
A night out watching some meteor shower in August? Think again - by staying outside on the Moon, you're taking a gamble with meteorites, and it's not just "at night" - it's all the time.
https://mooncampchallenge.org/meteors-on-the-moon-sunny-with...
To live on the Moon or beyond, you need a proper ship, and steel shipping containers with bathroom tiles, aren't. Those are at best boats to carry people to the ship, at worst cargo sacks. Not the ship. The ship has to be "radiotight", so to speak, and for that, they have to be built in low- or microgravity.
And that raises the question of politics: the world is not only ready to handle megaton sized ships on orbit responsibly, but moving away from such maturity fast.