There is nothing out there like an Apple Retina display. The glossy glass surface really makes colors pop. The resolution is excellent. If this is the experience you want, then the Studio Display is the only option, unless you have Pro Display XDR money to spend.
If you are pragmatic about things, a 27" or 32" 4k display can be a great choice. I use an LG 32UL500 (at the lower end of the 4k panels) with my mini. I regularly bounce back and forth between it and my 13" M1 MBP. The difference between displays is noticeable, but not nearly as jarring as it was with other lower ppi display panels.
Scaled resolutions work just fine. The GPU processing penalty is minimal for non-gaming use. The images you see of terrible looking text renders come from putting the display in a mode that favors sharpness and removes the shaded pixels used to help your brain interpret curves (follow the setup used at rtings.com if there is one for your display, and you will be quite happy).
With reasonable expectations, a 4k display is an excellent option. Once the budget creeps up to the $1k range, then the Apple Studio Display becomes the leader.
In regard to your questions.
1) Apple scales for 4k, the same way it does for 5k. Scaled resolutions work just fine and Apple uses a fractional scaling as the default resolution on all of its laptops (if it were a significant resource problem, Apple wouldn't do it on its mobile devices). Things are slightly less sharp due to the pixels being a bit larger. At normal desktop viewing distances, it's not a huge issue. Even with 32" 4k, the specular reflection from the texture of the matte finish on my display causes me more grief than the size of the pixels.
2) Apple's compatibility with third party displays can be quirky, but it seems that quite a few of the issues with the M-series machines have been worked out over the last few years. Apple's implementation of HDMI seems to have more issues pop up. I choose usb c to DisplayPort when I can. There is always a risk of things cropping up, even with first party peripherals.
3) I don't know if any display manufacturers built in blue light reduction options into their monitors. If you want it with third party displays, you can use the f.lux app.