Virtual Machines have a habit of not recognizing things. It is pretty common.
I am no virtual machine expert, but a lot of times a virtual machine works by simulating basic hardware so stuff like gaming inside a virtual machine is often out of the question.
I think it can be pretty hard to simulate super expensive hardware.
Anyway, it might work and I guess it is worth a try.
SSD stuff - I don't have one so take it with a grain of salt when I say that you can probably get by just fine without a firmware upgrade.
The firmware is like a little hard drive that exists on the device itself that has the instructions for how the internals of the drive should work. Most devices don't ship without working firmware in the first place.
Unless it clearly is not working, I wouldn't bother with doing anything related to firmware. I tend to view firmware as a last resort kind of thing. If you screw up the firmware you screw up the whole device forever.
It isn't like in Windows where if you mess up the OS you can just reinstall Windows and the problem will be gone. Broken firmware means broken device forever. Just like a messed up BIOS upgrade often means the motherboard is broken forever.
Basically, I would use a change of firmware as an absolute last resort method to fix any kind of problem.
On the subject of installing it, again I haven't had to do it before, but I just want to say that hard drives and SSDs can handle some pretty crazy stuff. My current hard drive is upside down in my case, because that makes the cabling work out better. My hard drive doesn't even care.
You could just literally set the SSD physically on the bottom of the case and it would work just fine. It isn't like it has to be in a 3.5 slot. Ideally air would be flowing wherever it is, but other than that you can do whatever ghetto sort of thing you want most likely.
I am sure you can get it going if you have a 3.5 to 2.5 converter thingy.
Transferring stuff - I wouldn't count on it. Call me old school, but in my day we saved everything that needed to be saved onto a CD or DVD and then we blew away everything on a drive when we didn't want to have an OS on there anymore.
That is how I would suggest you do it too.
If you do some kind of data migration technique, you may have a tough time.
In the ideal world, the Windows install on the SSD will be done when the SSD is the only hard drive physically connected to the computer.
Also in the ideal world, there won't be a 2nd drive capable of booting into Windows installed into the computer later.
Not doing things this way has the potential to cause problems booting, like for instance if both drives have OS installs on them and they both fight over which one the computer should use.
If you took the 1 TB drive out with its OS still intact, install the OS on the SSD, and then put the hard drive back in with its OS intact, the above problem could occur.
It is best to have one OS gone before another OS is installed if you don't intend to use both at the same time (and you wouldn't if its the same exact OS).
The only time I would install an OS with another already present is if I wanted to be able to switch between them, and then I would definitely do it with the first one still available in the system while the second is installing. That way the second one can check and see that it isn't the only one and put its information into a table so that you could choose between them at start up.
Anyway, if you do it like I suggest, copying data with CDs, blowing away everything on the 1 TB, then installing on the SSD, it should pick up the SSD automatically as AHCI and the process should go pretty smoothly with little configuration from you.
If it was me, that would be how I would do it, tbh.