I also have a Surface GO 2 and been running Linux for the past 2 years. In the beginning the only “trouble” was that you you needed the surface-linux kernel for drivers, but that’s no longer the case as all drivers have been upstreamed to the mainline kernel.
For distros, anything goes as long as it has a recent kernel. I just go full Arch (EndeavourOS is also a good choice).
What you probably want to pay attention to is the desktop environment - i’ve found Gnome works best for touch and tablet devices KDE requires some tweaking.
For 2, check the flathub store, you might be impressed with what you find for note-taking and PDF editing. Definitely some good options out there for Linux.
3 is a preference. Generally use internal storage for OS and external for data. Linux doesn’t take that much space, so if with 120GB you’re having storage issues, just ditch windows, problem solved, lighter system.
4 Yes it works.
This is why I recommended a Shield for which there is an actively maintained LineageOS. Yes, it’s an investment, but well worth it nowadays.