1. I would do some kind of coding that is externally forced (where you can't hand-wave away the hard parts). Whether that's Advent of Code, Leetcode, codewars, codeforces, hackerrank, or others. Consider taking online courses, following online tutorials on adjacent areas that you've never looked at before. Consider getting a couple of the easy AWS certs. You don't have to be able to do Leetcode hard problems to have a job in industry, but you probably should be able to do 80+% of the easy ones.

2. Yes, but so what? It's not like you can change it without lying (which I do not recommend as I think being straightforward will serve you better practically and psychologically).

3. Applying for roles you're interested in, would enjoy, and are qualified for does not seem like a crazy plan. Whether there are 200K or 1M jobs in your consideration set, those are both more than high enough to apply to find the one that's next for you.

4. Yes, your timing is bad. So what? You can't change that either and so it doesn't impact your next steps, which are to get your skills back up to at least 90% of where they used to be, which will get your confidence back up to at least 75% of where it used to be, so get cracking on that.

Wishing circumstances were different will only burn daylight and runway. If you were competent before (I read nothing to suggest otherwise), you have the brain for it; you are sorely lacking in confidence and are probably a little rusty. Both of those are solvable with some directed practice.

Good luck!