So... I might just be overthinking things but I'm kinda worried that my 7200 RPM HDD could run into performance issues when playing. What do you folks think a HDD player could run into?

Secondly, does anyone have experience with SSDs? I'm not certain if I can install a SSD as a replacement for my D-Drive or have an external SSD be recognized by my system.

7200 RPM is a decent speed. The performance of your hard drive would also depend on how old it is, and how much you used it. The only problem I can think of based on the info you gave me is that it would run slower than drives with a higher RPM, SSDs, or M.2 drives. Why not just add your SSD to your PC, instead of replacing an existing drive? If you are running games on an external SSD, you wouldn't get as much out of it, compared to using an internal SSD. I apologize for any typos and errors, it's getting late as I type this.

Check out if you have a free SATA power cable inside your PC (2nd pic on the left in the link) and a free SATA port on your Motherboard (3rd pic). If yes then you can plug in a SSD.
https://www.alphr.com/features/378925/how-to-install-an-ssd/

If you run a Laptop i'm not sure you can plug in a 2nd drive next to the HDD. Check that out...
If not possible you have the option to clone your HDD to the new SSD (incl. OS) with no data loss.

Good news is currently is a good SSD in sale @ Amazon.
Crucial MX500 250GB-2TB versions.

I'll take a look at my PC case when I'm at home. I do believe I know where my HDD is in the case but as far as ports... I don't know but it's good to have an idea as to what I'm looking for now.

How about just buy a new 512GB internal SSD (E-Drive) for games only? Simple, cheap & efficient.

It will depend on how much data game will preload into RAM. If it's a lot then all you'll get is slightly longer area loading times. Witcher 3 is perfectly playable from HDD. Doom 2016/Eternal also. And TBH no game so far except some very demanding flight simulators really require SSD. It's all about longer initial loading and loading between areas, nothing else.

I'm sure that optimization will be top notch but since the game looks busy with a lot of stuff on the screen - if you'll get some stuttering here and there you can always just add SSD. For desktops it's super easy - if you have M.2 slot on motherboard - get M.2 SSD, for desktops it will be 2280 size most likely. If you don't - you can get SATA or PCIe (latter is faster but requires a free PCIe slot), for laptops it will be either M.2 or SATA, no PCIe card option obviously.
You just need to find your laptop model and check what slots does it have.

There is an exception - ultra slim laptops that have everything soldered on the motherboard so the only storage expansion options will be USB drives or NAS. But those are usually too slow to run games like this one.

So I checked my C drive and I have a 1TB SSD that houses Windows 10. I'm wondering if there's a way to tell GOG to install CP '77 there?

Edit: why -> way

Yes, you can choose the install directory.

If it's like anything else, probably 55% of available RAM and 95% of vram. Everything else will get dumped to the pagefile as needed. And something to keep in mind, make sure your swap file is set on your SSD too. Otherwise it will cause a slowdown. Despite the claims that a swapfile will cause a SSD to die faster, I've never seen it happen. From personal experience, I had a 1st gen 60GB SSD that I used heavily for 8 years with a dedicated 8GB swap. When I retired it a few years ago, it still had 25% of it's life and hadn't even started using up the failure blocks.

It was a OCZ if anyone's curious. Right now it's still chugging away as the OS/Cache drive for my media server, and also hosts the temporary transcoding files. 3 years of continuous use with 2 kids and two adults and sitting at 21% life.

I've seen that happening multiple times, especially on workstations and servers that write a lot of data.
But there are two kinds of how it will happen. Some companies were simply disabling writes after some amount of data is written they were saying that it's to "protect user's data" which was nothing utter BS to cover up very blatant case of planned obsolescence. Because stored data isn't affected by writes, only free cells are. I remember there was something about class action lawsuit going on. Second case - any machine that swaps a lot (really busy server or a machine that either used for video converting/rendering images etc) can simply wear SSD flash in 2-3 years.

With those usage cases heavy swap usage can't be avoided unless we're going into high end hardware territory with 4Tb of RAM. In that case just use separate 120-256Gb SSD and replace it when it's worn out/

For gaming PC though - best option is just to add more RAM. Because while swapping on SSD is slighly faster it's better to avoid it entirely because random read/write speeds on SSDs are still up to a thousand times slower than RAM random read/writes. Only linear read/write speeds can be comparable on server grade high performance SSDs.

32Gb of RAM isn't that expensive and waay more than enough for the game. Will leave some space for other apps to run. 64Gb if you're feeling like having 50 programs running and 200+ browser tabs open. At this point the only PC that got less than that i have is 2013 laptop which i use for office stuff and as NAS to move stuff around since it got 2 2Tb drives. Even my old desktop with Phenom II X4 got 32Gb of RAM. And considering how modern Windows and Linux use RAM it also increases performance (free RAM is used for cache)

Buy an SSD if you can. Once you experience the speed and performance of an SSD (especially if your OS runs from it) then you'll never go back to HDD except for pure data storage.