Help with Assessment of Older Mountain Bike Components

First, it's the condition of the bike and components that matter, not really the age. Although I haven't heard of Zion either, the components you describe are at at least a level up from those typical of really bottom-end mountain bikes.

Crankset (info https://www.servicearchive.sram.com/sites/default/files/techdocs/2005_cr-4arm-e-r2.pdf ): FireX was at least mid-level (seems to use ISIS BB); although it may be difficult to find spares for it, if it wears out or breaks it's easy and inexpensive to switch to a square taper or Hollowtech II BB (same threads) and a crankset that will fit on that new BB.

Derailleurs: Shimano XT is good quality. Hopefully, the description means the rear derailleur is XT, as the front derailleur's performance varies less with quality.

Avid mechanical disk brakes (BB7 are very good, BB5 are good) and Speed Disc wheels again seem like mid-level parts.

In your price range, the non-suspension fork makes sense, as even a decent entry level suspension fork would be $200+ on its own.

Good luck!

PS - As you've no doubt noticed, bikes and parts have been in high demand for the last year and much is sold out. Other than that, I wouldn't expect major difficulties in getting replacement parts for this for at least the next few years, although selection may be reduced as a 26"(?) 9-speed system.

Fatbike

The "fatbike" is a marketting term - its just a rigid MTB that has been coupled with super wide tyres, often 100+mm wide. They do have places where they excel, but that is soft blown sand and fresh snow, and when the tyre's air pressure is very low.

A fatbike rides at about normal walking pace when riding on these surfaces (which is much faster than walking pace on these surfaces!)

In normal usage, a fatbike is very slow due to high rolling resistance. And the expensive tyres mean that the maker often cuts corners on the rest of the build, to be affordable and meet a price point.

For anything that could be called a road, ie is driveable by normal cars, the pictured bike will be perfectly adequate. You don't need one.

Zion was the brand for in-house bicycles from Jenson's USA. The Zion bicycles were solid and nicely built bicycles, with a reputation of having a very good quality-price ratio.

Fat bike have very wide tires (4" or more). Even too wide for daily rides. They are deemed to be good for snow/sands (outside roads). However, they can be quite slushy. Fat bikes can run on very low air pressure in the tyres, but at that point it becames very tiring to cycle on smoother surfaces. If you pump the tyres enough to get a comfortable pace on smooth surfaces, then as soon as you are on an irregular terrain, it is very bouncy and uncomfortable.

I suggest to give a try at the bicycle you posted. Zion bicycle may not fit the large tyres that are fashionable now (something around 3"), usually being able to accomodate tyres up 2.3/2.5", but it should be more than enough for dirt and semi-sandy roads.

EDIT/add-on: since you state the tubing is Reynolds 4130, it should be a Zion 660. Coming with disc brakes mount on the rear, it is likely to be one of the most recent model (relatively speaking, I think they started having the disc mount ca. in 2005) before the brand was discontinued from Jenson's.