It seems that external displays are only supported on HDMI (e.g. Mac Mini) but DP Alt mode is still listed as WIP so I'd assume MacBook's with only USB-C (all of them?) can't support an external display.
it's important to set UTM to use Apple Silicon _virtualization_, because otherwise it uses QEMU and is thereby emulating. With Apple Silicon virtualization, having macos and arch and fedora all going at once is amazing.
pertinent references :
or search for UTM on the Apple app store, where it's prebuilt (and that's what i use successfully).
It's still is a great laptop and I recommend it for the hardware overall, but not fan-less indeed.