As @minik posted above, one monitor can be connected via USB-C and the other must connect via HDMI. You cannot connect two monitors with USB-C. Unfortunately, this is a basic limitation of the M1 Mini, the Intel Mini's are more versatile in this regard.
It should. I used one to re-install Big Sur on my 2018 mini when the HDMI port was not cooperating (the above adapter connected to an Apple HDMI to DVI adapter to DVI cable to monitor). Only part I cannot confirm is the 4K (since my monitor is not).