I guess if I had known this, I would have got the LG5K. I use Citrix with my mac to log into a Windows platform, and there is no problem there with font rendering, as many have noted.
Yes, it seems 5K monitor is the only choice to get about the same display quality as internal displays Apple uses.
4K probably next best choice but not really best solution unless you are happy with (2x) 1920x1080 even fractional scaling is pretty good in M1's. However simple tests show that's not optimal for graphics even fonts surely are much nicer than in 2K monitors.
Anyway looks like font rendering can be made work in MacOS since even Microsoft Remote Desktop shows fonts in Windows just as good you would see them using machine local.
I think the best I have come up with so far is to tweak the contrast a bit in the Accessibility setting to a 1/2 tick of increased contrast and to use TinkerTool to turn off font smoothing. It's amazing that there are so few reasonable options to reproduce the sharpness and clarity of an internal retina display on an external display.
I also used my M1 a while with turning off Font Smoothing completely but later on I started to notice more and more issues with it where fonts just got too thin, especially anything with colored text boxes like iMessage, Calendar etc...
Now just couple days ago I took another approach using Font Smoothing at default value (2) + antialiaising switched on (not sure yet but I think it makes a minor difference) and then those colored text boxes look good and "fat" fonts surely show up here and there but not really too badly other than just menu bar. Also I removed custom css for Safari and let it be default too now.
So currently I'm using these settings:
AppleFontSmoothing 2
CGFontRenderingFontSmoothingDisabled NO