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This worked perfectly!
I created a "Steam Games" folder in the Applications folder.
I followed the directions https://help.steampowered.com/en/faqs/view/4BD4-4528-6B2E-8327 to "Add Drive" (which allows you to select a folder) and to move our shared games there.
Both locations appeared as "Macintosh HD" but you can rename them in that same Storage settings screen by selecting the three-dots button next to the available space graphic. Select "Rename Library" (it's just an alias within Steam).
NOTE: I had to repeat these steps on the second Mac account, which also has its own Steam account (linked Family accounts). Once I added the drive to Steam, our shared games showed up as playable (and are playable!).