Perhaps my recent NAS/home server build can serve as a bit of an inspiration for you:
- AMD Ryzen 8500G (8 cores, much more powerful than your two CPUs, with iGPU)
- Standard B650 mainboard, 32 GB RAM
- 2 x used 10 TB HDDs in a ZFS pool (mainboard has 4x SATA ports)
- Debian Bookworm with Docker containers for applications (containers should be more efficient than VMs).
- Average power consumption of 19W. Usually cooled passively.
I don’t think it’s more efficient to separate processing and storage so I’d only go for that if you want to play around with a cluster. I would also avoid SD cards as a root FS, as they tend to die early and catastrophically.
That system also sounds a lot more capable than mine. How did you end up with 25 VMs?