Earlier quoted context omitted.
Something I just discovered is that Office 365 Family only lets you use custom domains if they are hosted by GoDaddy. If you want to use another domain registrar you have to get Microsoft 365 Business, which has a similar price as Google Workspace :( There's no way I'm moving my domain to GoDaddy.
There are reddit posts showing how to bypass the Godaddy requirement. I used them to setup Office 365 for my family. I have since moved the family emails to icloud mail since we already pay for icloud+ and I get multiple domain support, and aliases.
Can you wildcard aliases with your domain?