XBOX Series X Fan has been loud since external SSD drive purchase

Not really...

Xbox Series X games / upgrades / updates has to be installed onto the Series X internal or expansion card SSD,

You can have Xbox One games on your external hard drive that will get an Series X upgrade but the games will need to be transferred to the Series X and then the Series X upgrade will need to be downloaded onto the Series X SSD,

As an example...

I have Marvel Avengers on my external hard drive that will get the Series X upgrade and I will transfer the game over to the Series X SSD ready to download and update the game to the Series X version when available.

Fair enough, a slow internet connection is as good excuse as any.

Be aware however that while that drive will work on Series X, you won't be able to play Series X games directly from it. Series X games will require faster access and read speeds. My understanding is that the Series X games can be 'backed up' on an external
drive and then need to copied/moved over to either the internal SSD or the External SSD's that will be available for the machine.

The Series X will read and play Xbox One games from an external drive though.

This has been covered and been mentioned as it has been a big concern. Right now, yes you can use your external SSD to play Xbox One and Xbox 360 games but you will not be able to play stored SX games on the external SSD. To be able to able to play SX
games they need to installed on the Series X's SSD not the external one.

Hi and thanks for reaching out. I hope you’re doing well. I'm an Independent Advisor and a Microsoft user like you and I'll be happy to help you.

Yes, backwards compatible games will receive some benefits when played on an Xbox Series XIS, regardless of whether they are installed on the internal SSD or an external hard drive. These benefits may include improved frame rates, shorter load times, and higher resolutions, depending on the specific game and the capabilities of the Xbox Series X.

In general, games that are installed on the internal SSD will likely have faster load times and more consistent performance compared to games installed on an external hard drive, since the internal SSD has faster read and write speeds. However, games installed on an external hard drive will still be able to take advantage of the improved hardware and other features of the Xbox Series X.

An Xbox One model had a hybrid hard drive/SSD. Now currently the Xbox Series X|S only has a SSD drive in it.