It happens to a lot of people so no worries. Not to say all shop assistants are out to get you, but they don't always have your best interests in mind. Not to mention the I've seen some dreadful advice from places like Currys in the past. Of course that also means don't just trust what I say, validate different points of view. Although I'm sure Gofre would generally agree with what I wrote previously, and before he left Bluewolf wrote a very comprehensive guide found
here which again is mostly in agreement. Of course I appreciate that this will sound a bit like an echo chamber.
Space wise then you're probably going to be okay. If you've got some external drives, then you have options for offloading data if need be. And of course cloud storage is a thing. If you were aiming to buy something new, I'd probably say go for 256GB though (the next step up from 128GB) just to ensure you've got proper growing room.
Speaking a little more generally, do you happen to use either of those external drives for backups? It's pretty much habit now that I mention backups whenever possible, just because I see too many people with no backups, something happens and they lose important data.
Regarding the display, it could be easily fixable or a more pressing issue. It could be anything, from a loose internal connection, to a weird driver issue to a problem with the panel. There's no saying for sure, and in the case it's a software problem you may find that the flashes persist even on an external monitor. This is one of those "computers are complex" type issues, where we could run through dozens of things and not find the problem.
I would agree with your sister, that you spent too much. But more in the sense of the laptop being overpriced to begin with, rather than your budget being wrong. £500-600 is typically what I recommend for the average student laptop, because it balances getting decent, long lasting hardware without going totally overboard. Laptops in that price point will typically be more powerful than you need right now, but will give you ample growing room if your requirements change, or if things just start to slow down with age. We've all been a victim of owning an old laptop that after a few years runs like garbage. It's effectively a "spend money now to save money later" approach.
In terms of the idea gathering, I'm not expecting that recommendation to really change. The Dell Inspiron I recommended in my last post is the sort of thing I've been recommending for several months now. Momre broadly speaking, I've been recommending similar laptops for 3 years now. There's nothing new coming up that's likely to change that general recommendation. The extra nice thing with Dell is that not only can you get student discount, but they also tend to offer flash sales sometimes going as far as 14% off.
But the short of it is that basically any similar laptop to the Dell will set you back in the £500-600 region. I'd say £650 is a little expensive, and more likely you'll be looking at £550 if you get student discount or other discount codes. Black Friday and Christmas tend to be hit and miss, occasionally you get good deals but quite often the sales are a bit rubbish, or prices are increased immediately beforehand to offset any big drops. Given the COVID situation and availability still being poor, I wouldn't expect to get any super great deals but you never know. If buying new is the route you want to go, I'd say aim for around £550, give or take a little, and snap up a deal when suitable. In all honesty, I'd have no qualms recommending the Dell right now, so if you're waiting and a deal happened to come up I'd wager that's what I'd recommend in the future too.
Also worth noting, your current laptop is in more or less perfect working order. That means it's worth "something" if you decided to sell it, effectively bringing the price down further.
For the most part, a monitor is a monitor. If you're just looking for something cheap, it's going to be more a matter of features than brand. Generally when it comes to tech, we rarely recommend by brand anyway. Of course we all have our favourites, but it's a personal choice more than a "this brand is superior". If you've never heard of them (i.e. they're not well known) you typically want to avoid but other than that brand means very little.
Just to give you some ideas,
this Acer,
this Dell and
this Samsung are all fairly similar. You could dig into which one is technically the "best" but as an exercise in just getting a cheap monitor realistically any of them would be fine. You could of course pay more and get a larger monitor, or one with more features (e.g. height adjust, speakers, etc.) but it'd never be a matter of "pay more because brand X is better than brand Y".