Can I use the game pass for Xbox only to play Minecraft online with friends?

No, you do not need to upgrade to Ultimate. You only need that if you want Game Pass for console, pc, Xbox Gold, Cloud Gaming & EA Play in one package. If you just have Minecraft and want to play online with friends, then you only need a gold subscription. If you do not own Minecraft, then you can purchase it, or get Game Pass for console, and play the game using Game Pass instead.

I own a series s console and I only own GTA 5 for my console unfortunately.

I did see game pass core, but after reading into it it's basically just Xbox live gold, I did see a version of game pass, but only for Xbox consoles only (no cloud or PC) it gives you access to the game pass library with the exception of EA play.

I was unsure (as it did not say) that I can continue to play Minecraft etc online with friends.

Brilliant, that's what I needed as my son mainly plays Minecraft and the occasional FPS game online on game pass and he has never used either the cloud or PC gaming side of game pass ultimate, thanks for the help 👍

That would be Game Pass Standard so that would work since those games are included with that subscription and it includes Core.

As long as you own the games, all you need is Game Pass Core.