Hello, and I apologize for the late reply.
Since your PC doesn't support Windows 11 officially, you can use a free third-party utility called Rufus that will allow you to download the ISO, create a bootable flash drive, as well as bypass the CPU and TPM requirements all at once. To do the following steps, you'll need an 8GB USB flash drive.
Once you download Rufus, push No on the update prompt, and then select your USB flash drive at the top. Next to the "Select" button, you should see a down arrow. Push that, and select "Download", and then push the "Download" button again. In the popup, make sure Windows 11 is selected for Version, then 24H2 for Release, Windows 11 Home/Pro/Edu for Edition, your language of choice for Language, and then finally, select x64 for Architecture and then push "Download". Should you wish to, you can also download using a browser by pushing "Download using a browser".
After it is finished downloading, push "Start" to create the bootable USB flash drive. After pushing it, you should be asked if you want to customize the Windows installation. "Remove requirement for 4GB+ RAM, Secure Boot, and TPM 2.0" and "Remove requirement for an online Microsoft account" should already be selected for you; you can also choose for Rufus to have Windows 11 not encrypt your disk with BitLocker. You can also choose to deselect the "Remove requirement for an online Microsoft account" should you want to use the previous license from Windows 10.
Once it finishes, eject the flash drive and then boot from the USB. Once you reach the partitioning stage, you can partition as you'd like. After you've finished partitioning, you can select the volume for Windows to be installed on. Alternatively, you can take a picture of what you see and then I can help partition the disk for you. ¹
Because you're repartitioning your drive, Windows will use the EFI and MSR (system reserved partition) that you already have, and won't touch the other Windows installation in any way (however if you have other disks in your PC make sure to take that out as a precaution so Windows doesn't accidentally create an EFI partition on the wrong disk).¹
Afterwards, let Windows install, and then setup Windows 11 accordingly and see how it runs for you.
If you see that Windows 11 runs fine, you can then start moving things over using software like FreeFileSync, Syncthing, Syncback, or even the Microsoft User State Migration Tool and sync (or transfer) your files over to Windows 11.²
Once you have things up and running and have transferred a few files from your old installation and things seem to be working (run some updates too), you can repartition your disk in such a way that Windows 11 now uses the space that Windows 10 used to do. Depending on how you shrunk your disk, your Windows 11 partition is probably towards the end of the disk, while Windows 10 is in the front, so you will need to do some more moving.³
Fortunately, software like GParted (Linux based) and NIUBI Partition Editor (and a plethora of other partition editors). Sadly, Windows' Disk Management doesn't really work in this case since you aren't able to move partition around.
What you'll need to do is move the Windows 11 partition next to the Windows 10 partition, and then gradually shrink it until you have no data left to move on Windows 10, wherein you can just delete the partition after moving everything and saying goodbye to Windows 10.³
One last thing, if you set up Windows 11 with your Microsoft account, Windows will pull the license from your Microsoft account and carry over the activation state from Windows 10. Once you connect to the internet and sign into your Microsoft account at the OOBE, Windows will take care of that for you. If it doesn't activate, you can manually go to Settings > System > Activation and then see the issue.
As for your questions, the answers have been marked with superscript numbers corresponding to the order you asked them :)
Hope to hear back from you, and I do apologize if this was a lot to read.