How does passkeys work with mac mini?

Hello all, planning to buy a base m4 mac mini. I have two concerns ( I am not going to buy a keyboard with touch id)

1. How does authentication with passkeys work? On my mac, I have touch id, so just a tap and authentication is done (for example logging into a google account).
2. Storage is just 256 GB, I have 512 GB on mac and 256 GB is already filled up without any heavy files (which is how I'll be using the mac mini too). I checked on my mac and 120 GB is just "System Data", not sure if mac mini also takes up this much space. So I'm a little concerned about the storage.