I did something similar a while back and this tutorial helped me: https://kb.vander.host/operating-systems/how-to-import-a-qcow2-file-to-proxmox/

I think the import command it has you run allows you to import it however you want. It’s my understanding that after you import it, it’s no longer using the qcow2 file as the backing drive.

Also has the benefit of being a completely local DNS server for all your devices to use. I think you are also able to add custom entries if you wanted to be able to refer to your devices using dns. It also has some caching benefits so there are less DNS requests going out of your home network.

Personally I set up AdGuard Home because it has DNS over HTTPS support out of the box, which means your ISP cannot see your DNS requests. Pihole supports this too, but it requires additional setup.