Processes in Microsoft 365 for setting up Office apps, redeeming product keys, and activating licenses.
I am looking to do the same thing as you so hoping we can here an answer from someone.
This was answered in depth over the last few pages.
The requirement is that a domain needs to be registered via GoDaddy to be used within outlook.com / Office 365 outlook-account.
I explained a few pages back how to use GoDaddys name servers to create a record for your domains even without the domain being registered via GoDaddy, but that is only a temporary solution because GoDaddy will deactivate it after a while (this is only intended to be used to move domains, not as a permanent production use case).
So for proper use you will have to move your domain over to GoDaddy.
There's no way around this.
After that just follow the FAQ.
It's all really straightforward.