Ok, here is what I've done since my last visit:
Added an external Samsung T9 External SSD. It's connected via USB3. I have no USB-C connectivity on my editing machine. It contains footage only.
Dedicated one of my internal SSD drives to be used for Adobe cache files, databases, etc.
Tried latest version of Premiere (25.5). STILL having issues with slow response and timeline lagging.
Went back to 25.2.3.
I have no ide what to try next. Getting really, really frustrated since I can't use latest features.
Ok, this should be the end of this discussion.
I didn't want to give up so I once again installed the latest Premiere, version, 25.5.
Next step was trancoding all of the m2ts files (3) for my usual multicam edit. For this I used the ingest feature in Premiere.
Glad to report that Premiere is working better than it ever did when I used proxies. I still don't know why I couldn't edit smoothly once I upgraded to 25 but I am happy that I can use the latest version of Premiere. Thanks to all who offered assistance.
Have a blessed day!