What is the best method?

Sometimes the best method isn’t a transfer at all. Don’t forget transporting is an option.
Do you need to transfer the files? or could you just use an external you share between different PCs?
If an external works, but seems inconvenient, you can fix that by having the drive connected to a USB switch. When connected to a switch you can press a button or use a remote to change which PC the drive is connected to giving you instant access to the drive contents without having to sync/copy anything over.

Links below for examples of USB switches
https://www.amazon.com/Cable-Matters-Sharing-Computers-Peripherals/dp/B083JKDNRJ/
https://www.amazon.com/Sabrent-Computers-Peripherals-Indicators-USB-SW30/dp/B074TYDJK2/

fearing it may stop functioning in the future

It most certainly will.
If it has a removable battery, remove that ASAP, and it’ll probably last a lot longer. If your phone isn’t a total piece of shit then you can probably run it without the battery strictly from the charger’s power. If you have a UPS, plug the phone’s charger into that when accessing the phone. If the phone is a piece of shit and requires the battery to boot (some actually do, you’ll have to check) you should consider buying a replacement battery or figuring out a way to wire DC power to the connectors if you have the skills for that. With a dud/worn out battery an otherwise perfectly okay phone may be stuck in a cycle of charging, booting, and depleting the battery during the boot process, and shutting off preventing you from accessing the device until you replace the battery or wire appropriate DC power to the battery connectors.

Is there a way to effectively preserve this phone, including all its data, in a virtual environment?

In short, no.
Android is designed in a way that “knows better” than you. You do not “need” to have low level access to the phone data, so Google/PhoneManufacturer has locked you out “for your own protection and security”. With computers, it’s pretty easy to clone a boot drive and boot it into a VM for archival purposes and the ability to migrate to different hardware in the future but phones actually go to great lengths to prevent this and that will be your biggest obstacle here.

If your phone was rooted and had the bootloader unlocked and a custom ROM installed you could potentially have an easy way to clone it all but that’s usually never the case.

I’m looking for a method to create a virtual replica of the phone that retains all its contents.

This should really be quite simple but the manufacturers hate you. So, it isn’t. This is sad, but this is just how it is. Preventing easy “stealth” cloning (cloning without unlocking store now/decrypt later style) is good but these devices should allow authorized cloning (boot, decrypt/unlock, then clone) to the owner but unfortunately they do not.

Keep the phone for as long as you can, but plan for it to die some day. If you cannot find a tool to back something up, set up a DSLR/mirrorless camera or suitable smartphone into a copy stand and record a video of the screen as you access whatever data may be in apps without a good way to export their data. It’s a brute force method that will produce difficult to browse data, but it’s foolproof. Screen recorders won’t even work on Androids in all cases because certain apps block them from functioning. They claim this is for “your protection”, but really it’s at your inconvenience.

Expect 300MB/s transfer rate for the entire enclosure. If that’s fine with you, it should be usable.
It doesn’t support hotswap though. Removing a drive (or one erroring out) in operation will reboot (disconnect/reconnect) the entire unit power cycling each drive. Bad for a high availability system but fine for a cheap DAS for the price.

Uncorrectable sectors are bad.
Get a new drive, 500GB models are cheap/free. Buy three. Main+Backup+Backup minimum if you aren’t already.

Try FreeFileSync for this.

It looks like all of your data fits on the 6TB and be backed up to your two 4TBs. Why aren’t you doing that?
That would ensure an easy and simple way to maintain 3 copies.

4TB 2.5" drives and a big WD 8tb 3.5" drive that are old USB 2.0 externals in their factory enclosures.

I don’t think any drive manufacturer sold 4TB or 8TB drives in USB 2.
Did you mean USB 3?

or do I need to buy an actual USB C drive like this?

USB-C is a connector type. It actually allows for USB 2 speeds. (30MB/s)
If you’re going to buy anything get simple USB 3.0 adapters that support UASP. You’ll get more than enough performance out of those.

Seems like a complete mess. Not sure what to tell you.
List the capacities for your drives and the total space used for each set of data.

How big is Data 001? Data 002? etc.
What is Drive A? What is Drive B? etc.

I can only connect 2 drives at the same time, maybe NAS could help?

Look for a USB DAS instead. Maybe a multi-bay docking station like a 5-bay that can let you plug everything in at once. Much simpler. A NAS would require reformatting your drives. Not bad for the future, just not ideal for right now IMO. Simplify how you access the drives you have in use before going to a NAS. They’re much slower and usually limited by 1Gbps LAN.

At least you can actually order them on WD’s website now.
$630 ain’t a fun price though but being able to put the order in is something.
https://www.westerndigital.com/products/internal-drives/wd-gold-sata-hdd?sku=WD241KRYZ

You have to figure out how many SATA ports and drive bays each system has. A lot of Optiplex systems only have room for just 1 or 2 drives, sometimes just 1x2.5" and 1x3.5" with no room for two 3.5" drives which isn’t exactly good for hoarding.

I’m guessing there’s no SATA beneath all of this?

Correct, these are native USB drives.
You are stuck with this so you might as well put it back in the case.

Got my hands on my enclosures.
These Easystore PCBs can be placed into these MyBooks. They fit just fine.
The PCBs appear identical. The Easystore has an LED but that’s just missing from the MyBook. Same board, different components, but most are the same. Even the winbond chip has identical markings but some others do not.

It’s something that everyone should follow.
It is also something that everyone can absolutely afford to follow, for at least some of their data.

Take this for example.
A 5 pack of 128GB USB drives is dirt cheap.
Encrypt them all, keep two plugged into a USB hub. One in a drawer, one you keep in your car (who cares if it dies) and store another in a safe deposit box/friend’s/family member’s house.
If your house burns down you get to keep that 128GB of data, if you want more, pay more, but this is available for under $45 so yes everyone should do it for at least some of their data. There’s no excuse.

Be extremely careful if you’re going to use any service.
You need to make sure you do not hand your film over to a company that will destroy/recycle your film after their digitization. Once the film is gone, it’s gone. Many companies destroy the film after scanning it and this is 100% avoidable. There are no methods of scanning that require destruction of the original film so you should never allow them to destroy or recycle your film. Besides that, many services just suck. Reviews are often useless because they’re either fake or come from people who don’t know the potential of their originals and are just happy to see something digital from them after their collections were collecting dust for decades.

Here’s a video showing a comparison of a scanning service vs frame-by-frame RAW capture with a macro lens and DSLR.
https://www.youtube.com/watch?v=3kC2hc_GzIA

When it comes to film scanning, there’s always room for improvement. Even if you get an okay digitization today I would still recommend preserving the originals because better digitization services can always come to the market and potentially at a better price. The ceiling for film scanning is quite high, but the floor is full of low tier trash services. If you look closely in the video you’ll see that the video he received was actually interlaced which is absolutely pathetic.

What do you recommend I do with my new photos and what’s left?

Keep local backups.
Buy three hard drives.
One to serve as your main copy, and two more externals. Copy your data to the main drive then repeat that process to ensure each of your three drives has everything stored on it. Go to your safe deposit box and store one of the external hard drives there. While back at home, keep storing your photos on the main drive. Every week or so plug the external in and sync it so it is up to date. You can use something like FreeFileSync for this. In 3 to 6 months, go swap the external with the one in the safe deposit box and sync the drive when you get home. In another 3 to 6 months, go swap externals again. If you have an event where you have lots of precious media you created, consider taking a trip to the safe deposit box sooner. If you go a while without taking any good photos, you can put it off.

Your 3 children can be the biggest threat to your data depending on their age.
Hard drives are fragile and dropping them is bad. Don’t give them the opportunity to knock them all over at once, and if age appropriate tell them how important it is to not drop/move/knock them over. If you have a safe at home store your external in there when not in use. If one gets damaged, you’ll have two extra copies while you order a replacement.
If you don’t have a lot of data (1,000 GB or more) consider using external SSDs since they are drop proof and cheap at those low capacities.