Update. Dave at SD was quick and very helpful. For some reason, Apple synthesizes the /Applications folder from two separate folders on two volumes - the Data volume (your stuff) and the System volume (their stuff). So that issue is resolved. Since the new Mini does not have a Firewire port the external HD is connected via USB port which may be a partial reason for the very long boot times.

I'm thinking that it would be more efficient, faster to boot, to buy a flash drive, 256GB, and use that to clone and boot from. Should I get a Thunderbolt flash drive or a usb 3 flash drive? What are major +/- for each? Thanks.