Have sadly no experience with npm install --prefix at all. I would probably simply go in a folder and just run npm install n8n. It then installs it directly in that folder.
To make sure it also saves the data in different folders you should then also set the variable N8N_USER_FOLDER. Like for example export N8N_USER_FOLDER=/home/jim/n8n. Best point it to a subfolder in the folder you did install n8n into. Then if you ever want to uninstall n8n and want to get rid of all the data you can simply delete that one folder.
After you did all of that, can you then start n8n either via ./node_modules/.bin/n8n or npx n8n.
Regarding pm2 it is best to check out this topic as I do sadly not have any experience with it at all myself: