I'm running an M1 Pro with Monterey and have everything up and running correctly, so it's definitely possible!
This github guide is very useful: Cardano Plutus apps install.
The new M1's use AMD architecture, which is why it's erroring out stating "aarch64-darwin is missing in artifact.nix".
What's most likely missing is adding these two lines to your nix.conf as instructed in the link above
system = x86_64-darwin
extra-platforms = x86_64-darwin aarch64-darwin
This instructs Nix to default to installing packages built for the x86_64 architecture instead of the M1's native aarch64 (i.e. ARM).
Perhaps in the future this won't be necessary, but for now lots of packages aren't built for ARM.