Should I invest in upgrading components or change my bike??

Just returned from a week-long trip of bikepacking a section of the Oregon coast; it was beautiful! Overall, I’m happy with my gear setup in terms of panniers and bags and in any case that can evolve independently over time. What I’m interested in exploring is whether I should invest in upgrading components or just sell this bike and buy a different one.

1. Geometry:
My Fuji Nevada is a hardtail MTB with limited space in the frame triangle. I’ve solved this by using a combination of small frame bag and a cage on the top tube to hold my tent roll. Ideally a large frame bag might have been better but then again, it’s not like I can’t use the space, I just have to divide it up in my current setup. My frame weighs just under 15kg without any racks, bags etc but I understand that’s fairly average for mountain bikes.

2. Gearing:
Currently I have the stock Shimano 24-34-42 crankset and 11-34 cassette (8 speed) with Acera shifter and derailleur. 99% times I’m on either the 34 or 24 ring, I can totally do without the 42 ring. While this is a great combo for general riding, I did find my lowest gear (just over 20 gear inches) to be insufficient on some of the steepest inclines with a loaded bike.

I did a lot of research on possible upgrades but would like to hear some experienced folks chime in. If I were to upgrade, I feel the most bang for buck would be to get a 10 speed cassette (11-42) with Deore 10 speed shifter and derailleur (M4100).
I would keep my current crank up front as is but use it as a 2x instead of 3x. My current crank is 24-34-42 and the M4100-2 that is compatible according to the Shimano chart is 26-36 so I think I should be alright – thoughts?

My logic behind sticking with 10 speed is that I can keep my current hub (my understanding is that 8,9,10 speed cassettes should be interchangeable and anything higher would need a different hub). Plus, with a 10 speed I can use my existing crankset and front derailleur (as 2x) and get all the gear ratios I need.

The proposed setup of 2×10 would give me a lowest gear of roughly 16 gear inches and also give me more steps to work with for smoother transition.

The good part is I can find the shifter, derailleur, cassette and 10 speed chain online for $130 total. I’m looking at a known online US shop so I’m fairly certain these are genuine components, just older model lines and hence cheaper. Including other misc stuff like getting a bike shop to look over my work or any special tools needed, let’s say cost to upgrade is $200.

3. Tires:
I currently have knobby MTB tires which were absolutely not fun on pavement. I’ve already ordered a pair of budget gravel tires so that should help lower the rolling resistance quite a bit while also being good on gravel / light trails.

My goal for the near future is to do more long distance rides on pavement and gravel and eventually train for something like a 500-700 km gravel race. I don’t care about the ‘race’ part of it as much as I just want to be able to successfully complete some of these big rides. Therefore I’m not keen on spending big money on high end bikes and components. At the same time, I want to make sure that I’m not sinking money into a bike that I might want to replace in just the next 2-5 years. I know these points sound a bit contradictory and a lot is subjective here but would love to hear thoughts from someone who has gone down this path.

Does this plan make sense, or would it be wiser to sell the bike and upgrade to a newer bike? I’m also fairly mechanically inclined and would count the upgrade process as a fun and learning experience rather than just a money saving exercise.

by __DonKarnage__