But I don't think there is a VM that can be installed ontop of Snow Leopard unless you do know?
I agree. I don't believe Snow Leopard supports such a thing - of course, could be wrong.
What I'm struggling with is whether you have just the one Mac or whether you have two. My uncertainty stems from comments in both your posts about "High Sierra", "El Capitan", "running Partitions", etc.
Snow Leopard (10.6.8) is roughly 10 versions behind the current and if I recall correctly, Apple's iCloud Services didn't start till 10.7.2. Consequently, I don't see how you hope to sync any version of iTunes to an iPhone 12.
How do you "direct both copies of iTunes to the same external drive"?
To answer your question:
Open iTunes > iTunes Preferences > Advanced > iTunes Media folder location - change to suit your needs.
My advice - take it or leave it
is to reconsider your strategy from scratch. If we knew for certain whether it's one Mac or more and if only one is it Snow Leopard? and if two, what OS is the other running; we could do our best to get to a solution that suits your needs.
Ian