In a bit of a dilemma, asking for opinions (:

I had a similar issue with my game too, put in alot of hours, unsatisfied with how I decorated, not motivated to play.

I knew I def did not want to delete all my data and start fresh, so I took a break and played my other games I haven't touched or games I didn't have alot of hours in. It doesn't even have to be Switch games, it can be older/other console games too (if you have any older/other consoles to play on). If you don't have that then you could do ither things liie hobbies if you have any, or take up a new thing.

I also liked to really plan my island out. I have an album saved with looooads of inspiration decor. What I did was take what I wanted for my island and put it in its own album to narrow down exactly what I wanted. I also looked alot for exact patterns I wanted to use around my island. I even took a graph paper and drew out rought areas of where I wanted each area to be and how big.

Basically I would say hold on to what you have now. You can always sell/start fresh later if you decide to, but you don't want to do it too soon and end up regretting that, not able to get your data back.
 
this is only addressing one specific a part of your problem, but recently i've been seeing a lot of people say that they were able to transfer their saves from one switch to another sucessfully. i haven't looked into it personally so i don't really know how they did it, but if you're still interested in buying a regular switch and you're scared that you'd have to start a whole new save on it that may not be the case.
 
I would suggest taking a break for a little while, and when you return, the answer will more easily come to you on if you want to continue working with your current island or if starting over would be better.

Also, if you dont plan on ever playing any other games on the switch and solely got it for animal crossing, I would not reccomend spending $300 on another system, just for the ability to dock it. Animal crossing is animal crossing regardless of the size of screen you play on
 
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