Teams between two Tenants best way

Hello together,

I´m struggeling with two Tenants where Microsoft Teams should be placed in one Tenant. In this Tenant i enabled all Features, dod Onboarding and currently invited some users from the other Tenant as Guests into our Tenant to allow them the Membership in Boards.

But when we now did a fast Adoption and we will have many hundret users from the other Tenant which will join our Teams Environment is that really the best way to create all of them a Guest Account?

For the Background we both have AD Sync to Azure and have the same License model (E3). There will be more hamronization regarding OneDrive, SharePoint, Exchange later….

Whats with "external Domain" Feature in the Teams Admin Section, is that a way to add their O365 Tenant? What do they have to do in their Tenant, same for our Domain at least? Whats the behavior, they will Login in Teams using their local Credentials and have to switch Directory in Teams (in the upper Right section) ?

Thanks for some clear words.