MacOS Recovery - MacBook Air 2017 to Mac Big Sur

I’m no tech expert so I’m sorry if I get terms mixed up. (Note, Mac was working perfectly fine before all of this)

tried to download Mac Big Sur earlier only to get stuck at about a minute left for an hour..then to get stuck in a boot loop. Customer services were looking up solutions alongside me!

Noticed that on login screen, where you type was slightly offset to the left of where it was supposed to be.

Tried SMC reset and NVRAM I believe in succession, one of them solved this. However, when I try to log into administrator I just get a prohibited symbol.

and Mac recovery looks like this (see image) where it isn’t accepting the password I use to log into my Mac, and is not accepting my iCloud with error ‘the supplied iCloud account was unable to unlock this volume’.

will erasing the Mac solve this issue? I just want my laptop back my files are mostly on iCloud, uni student critical year so more than anything I just need a functioning laptop.