In case it helps at all...
I've found that updating Win10 versions via Windows Update uses less disk space, & will use external storage, though once or twice, depending on the version, that didn't work so well when setup stored the files on the SD card rather than a USB stick, as the tablet didn't see the SD card on restart to finish installation. I've also mounted the ISO, then copied the files to a USB stick, or a temp folder on the hard disk, and run setup from there. To make sure there's not a driver problem -- Microsoft has those pretty much under control by now *I think* -- I've also attached a powered USB hub & a Windows To Go drive to the tablets & such, which worked well enough.
For a fresh install I've used DISM to get the basic Win10 files on a drive [VHD or internal or external], restored a backup of that partition on something like one of my tablets, set up the boot files, and 1st boot it adds the needed drivers. I've also just restored a backup of a working copy of Win10 on another device, & Win10 *Usually* adds the drivers it need & runs well. A couple of times I played with keeping a VM updated & added software etc., then restored a backup to a physical drive partition & ran hardware that way. Win10 really is pretty resilient.
If you avoid Windows Update pushing a new version on you, there's probably little wrong with sticking with older versions. I look at the upgrade as something on my to-do list, and just want to get it over with, not because I'm eager or see some huge benefits. I've already got the base copy of Win10 on this PC -- the minimal baseline copy I use instead of booting to a USB stick -- updated to 2004 to get it out of the way. I tried on the regular copy but the install failed twice, possibly due to a bug fixed last Tuesday, or I'd have all of our devices moved to 2004 already.