This seems like a very specific situation OP, are you uh... *coughs* asking for a friend?

I would personally say you're pretty safe to sell the Series S and get a PS5.
Right now the PS5 honestly doesn't have that many exclusives, the big ones I'd say are Demon's Souls, God of War Ragnarok, and Horizon Forbidden West.
For a heavy gamer I'd say it isn't worth it, they'd blow through those in a couple of weeks.
For someone playing only a few hours a week though, these titles should hold you over until more releases like Hogwarts and FF7R2 as you'd mentioned, as well as FF16.
If you can afford it and you want to play, I say go for it. You gotta spoil yourself a little sometimes, you know?

My PC is a beast haha
But yes, I know my situation is a bit of an outlier, not everyone can afford to spend this much on video games.

I mean, I have a PC with a 4090 in it, a Steam Deck, a Switch, and a PS5.If it's a PS exclusive, I get it on PS5. Switch exclusive on the Switch. Pretty much everything else on PC because I can run it at both 4K 144Hz on my desktop, and take it handheld on my Steam Deck.

I don't own an Xbox at all because my PC outperforms an Xbox and all of their exclusives come to PC anyways.

Edit: I knew that literally just saying what I own would get me downvoted, I really shouldn't have said anything

Everything that releases on PC will release on your Xbox and vice versa, wouldn't it make more sense to keep the PS and one of the others so you have more exclusivity coverage?
That's what I'd do.

That's great news, I'm glad I could help!
Enjoy the PS5!

The issue has been solved?

If that still doesn't solve your problem, here's another thing you can try. Put the PS5 into rest mode, wait a minute, then pull the plug from the wall. Wait 30 seconds, then plug it in again. It'll give you an error saying it wasn't turned off correctly, but that's good. This will force it to rebuild it's database which according to a lot of comments I've seen will fix the issue.

I know this sounds strange, so here's a link to one of the comment threads I found with other people talking about this and saying it works.
https://www.reddit.com/r/playstation/comments/qkoiae/comment/hx99h3a/?utm_source=share&utm_medium=web2x&context=3

I'm not 100% sure why this works, but I am an Electronics Engineer so I can make an educated guess. Since the PS5 is using the "other" folder as temporary storage, it's running into an issue where it's not correctly clearing it's cache. This tricks the PS5 into thinking the space is still full when in reality it's empty.
When it rebuilds it's database it realizes this and corrects it.

It very well could be. First finish any download or installations the PS5 is doing, then power cycle the device by turning it off and turning it back on, then check the size of the other folder.

Are you currently transferring old PS4 data or downloading anything?
The PS5 will use "other" as a place to temporarily store this data while it transfers.