Great to see you on here again too.
Yes the M1 chip is noticeably faster. I’ve heard plenty of folk say that 8GB is enough memory. However I’ve also been on group training classes where the difference in performance (when under stress) was noticeable between 8 and 16GB versions. If you have less RAM and an application needs more than what is available, it will write out to SSD instead, which will make your SSD degrade faster than it otherwise would (SSD drives have a finite number of write cycles - which is a problem when the SSD isn’t replaceable). So more RAM makes sense as it will reduce the need for dumping swap memory to “disk”.
I’ve not used Lightroom on my M1 Mac, I’m still using the same pre-“Classic” Lightroom on my old 2013 Macbook Pro (I still absolutely refuse to do a subscription to anything), so my M1 Mac is currently running Capture One for images. My opinion is that Capture One doesn’t work particularly great on M1 with 16GB with 50mpix images from my Canon 5DsR. I can’t get tethering to work yet on my M1 yet either (and that’s a Canon issue from what I can see, as the M1 doesn’t even recognize the camera being connected). Capture One is still using Intel code emulation under the covers, so there’s still work to be done (some parts of DaVinci Resolve Studio are also using Intel code, but it’s improving).
Yes you could get away with 250GB SSD if everything is external and you don’t ever need to use more than 200GB of internal storage. My question is, how long are you planning on keeping it? If it’s more than 4 years, I’d still go 16/500 myself so that future-proofing isn’t an issue (for the record, I tend to keep my Mac’s running for a decade or more as it’s better for the environment - so I don’t buy the base model).
Hope all is well with you.