You may choose any 2.5" SATA SSD up to 9.5 mm in height. You can use 500 GB as you mentioned, or you can go all the way up to 4 TB.  Any major brand will do. The Crucial MX500 tends to be a better price than the Samsung 870, because Crucial reduced the price a few months ago. I've used them and they are reliable. But any major brand will be good, and you will notice a substantial performance increase by switching from a hard drive to an SSD.  You can do either of your proposals: a single SSD; or two SSDs, one in the hard drive bay and one in place of the optical drive. Using a single SSD in the hard drive bay will save you from having to buy a caddy to install an SSD in place of the optical drive, and then you would still have the optical drive available if you ever need to use it. I would install a single drive of the capacity you need. If your reason for considering a second SSD in the optical drive bay is to have separate storage for data, there's another way to do that. If you have a single SSD in the hard drive bay, you can partition it with separate partitions for OS (C: drive) and data. I partitioned mine into three partitions: OS (C:); data; and music. No, adding a large-capacity SSD will not harm your computer's health at all. If anything, your system will become more reliable by getting rid of an old hard drive, as hard drives tend to have more failures as they age from extended use. Whenever touching components or working inside a computer, wear a grounded wrist strap, also called anti-static wrist strap, ESD wrist strap, or ground bracelet. It's a cheap and sensible precaution. Rest the laptop on an anti-static mat or at least a reasonable alternative such as corrugated cardboard. (Repeatedly touching a metal case part is not sufficient mitigation with modern components.)
My hard drive test had failed during the booting process. I'm in the market looking for a compatible SSD and I have narrowed it down to a few brands such as Samsung 870 EVO 2.5, Crucial MX 500 and Kingston KC 600. I have two options to consider either I could buy a 500GB SSD or two SSD 250GB each installing one of them by replacing the optic drive. So my question is which one should I go for? and do you think increasing the capacity of SSD for the older version of laptop's have major setbacks for the device health in general?
SSD compatibility with dell inspiron 14-3421