1. MDT with WDS will work in a workgroup.
2. You will always need to specify a username and password.

What’s are you ultimately trying to do here? What problem are you trying to solve?

Pool some cash together and pay for a hosted server.

Don’t take this the wrong way but any suggestion here is most likely going to go over your head unless you spend the time to learn how to do things properly. If you’re just looking to play minecraft and learn nothing related to IT (which is fine), spend the money on a hosted server. If you want to learn to properly secure things, I would recommend starting with something simple like using Tailscale so your friends can “VPN” into your local network so nothing is exposed to the public.

Here is a great guide:

https://tailscale.com/kb/1137/minecraft/