There is a chart on the jellyfin page about when transcoding happens. The server will video ranscode when you are attempting to play content the the client does not support or you are hitting the bandwidth cap or you enable subtitles for a client that doesn't support the subtitle's format. It will audio transcode when the audio format of the content is not supported by the client.

There are a few days to see if it's transcoding. You can check the logs or you can disable transcoding for the user account. When you attempt to play something the client will grow an error.

I have mine setup to only do audio transcoding. This is easy for any vou to do. For all my content I do my best to ensure morning requires video transcode.

With two bay NAS, I believe it depends on how you configure the file system. You should be able to upgrade to larger storage taking one drive out at a time.

I setup my NAS this year and just went with 4 bays and 18tb drives. I didn't want to think about my storage and I was committed to having a hands off solution that I should have to touch except to upgrade packages on.