Yes, you can use an external hard disk during the Windows 10 installation process.
You can purchase SD-card to USB adapters at a low cost, and you can use them if you truly need the memory card.
Sure, that should work. The files won't be impacted at all.
Files as in, what are these documents for?
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Ensure it becomes bootable, then use Windows to wipe the disk completely. Only the installation files will remain.