A newer feature in SharePoint allows you the option to “Notify your team” after a new file is uploaded. Your upload process is the same, but then your “upload complete” dialog now has an additional option:
When you select “Notify your team” you’re presented with options like sharing with SharePoint groups, or just individuals manually entered.
When finished, click “Notify” and the intended recipients receive a link that only works for them when logged in.
If you attempt to share with someone not in your tenant, you will receive an error as you can only notify people with existing access.
For these external users, you can instead separately share via the usual “Share” dialog when a file is selected. Here you’ll also find a newer feature that allows for blocking downloads if the “Allow editing” box is unchecked. This would prevent people making edits offline and creating multiple versions in silos.