You can do both things.
My comments is about creating a Windows USB Installer, but instead of a USB flash drive (USB stick), I used a USB enclosure with an HDD inside.
On an PC or a newer Mac computer, I could just plug in the USB enclosure and boot from it.
But on the MP 1,1/2,1, it will not boot.
Remove the HDD from the USB enclosure, and install it to 1 of the 6 internal SATA ports of the MP 1,1/2,1, the machine will recognize it as a normal SATA device and allow booting from it.
Windows can be run from USB device, but it needs a little hack (Rufus, WinsToUSB apps, etc) to pull that trick since Microsoft had locked down that function permanently.
Even if it might boot and run normally on another PC/Mac. , a WindowsToGo USB drive will not boot your MP1,1/2,1.
But anyway, why bothered with the slow USB port, when you already have 6 much faster SATA ports on the machine?
It has been 15 years since the MP 1,1/2,1 was release and many people are not aware of or remember its limitations.
Officially by Apple, the MP1,1/2,1 only supports Windows 7 32bit. Even though the hardware support 64-bit OS.