It's missing the power that allows the hot-swap capabilities but otherwise has everything that an SSD or regular HDD. In the literally hundreds of PCs I've put those in I've never seen it cause issues in any way shape or form.
No. However you can get free tools to take the ISO and a flash drive and make that bootable.
If by the activation code do you mean the key on the side of the computer or something else? You will need to use the windows key which should be on a sticker somewhere on your computer.
If I may...
A portable HD and a flash drive will be treated the same by your computer and the following tool: Microsoft Store
In fact, that works for HD's SSD's and Flash Drive. Just use it on the device you wish to install windows from, and boot from that device. (Note: I have done all 3...)