Should be fine, just don’t cheap out on the external drive / cable you will be using. And when you’re using something like smartctl you’ll know right away if SMART info is passing through your USB for proper testing.
I’ve done a lot of these type of scans via USB drives, honestly the more annoying part is that some USB drives do wonky things like go into sleep mode within 1-5 minutes which will disrupt any sort of scanning you had going. So with USB drive scanning I usually implement something to keep the drive alive and awake e.g. a simple infinite loop script to write a file every x seconds, or if you’re on windows you can also use KeepAliveHD.
Jellyfin should work fine for what you’re looking for. I haven’t run it on a Pi but it should work on that. You’ll be able to play music using the web ui as well as mobile apps if that’s your thing. It can also transcode on the fly so if your current browser/device/whatever can’t play .flac directly it’ll automatically transcode the playback to .mp3 or whatever it needs to be.
There are some other self hosted music/streaming projects you could take a look at that are much more built out for music playback specifically. Look into Airsonic-Advanced or Navidrome for example - I’ve been meaning to check them out myself but haven’t gotten around to it yet.