Yes, it can, but you may have the old version of the Apple Digital AV adaptor. You need to make sure the adapter version is A2XXX, not A1XXX, since Apple updated that adapter in 2019 to support HDMI 2.0.
I have an M1 MacBook Pro and I can confirm the updated version of the Apple Digital AV adaptor does support a 4K 60hz HDMI connection.
I believe your problem is that the HDMI adapters you tried so far only support stereo audio, to get 5.1 audio requires an HDMI adapter that supports it.
In these USB-C HDMI cables is a small system-on-chip computer that does the conversion from the native DisplayPort (or "DP") to HDMI. That computer in the cable will have to tell the Mac what kind ...
USB target disk mode requires the target computer to have USB-C ports. USB target disk mode does work in spite of Apple apparently scrubbing all mention of it from their website. MacWorld documented it though: https://www.macworld.com/article/225340/got-a-new-macbook-usb-target-disk-mode-works-with-the-right-cable-which-apple-doesnt-sell.html
I've used ...
Target disk mode on Intel Macs requires USB-C, Thunderbolt, or FireWire on the target Mac, it does not work by USB-A on the target Mac. Can you try using a thunderbolt cable? (or airdrop?)
from Transfer files between two Mac computers using target disk mode :
If you have two Mac computers with FireWire or Thunderbolt ports, you can connect them so that one ...
I can also confirm that 4k@60Hz is supported on a MacBook Pro (13-inch, M1, 2020, two thunderbolt ports) running macOS 12.0.1 (21A559), with the USB-C Digital AV Multiport Adapter A2119.
This is despite what the linked page says.