So, i just got my Macbook Air M1 16GB a few days ago. What's the best way to run Linux on it in a VM? Is it Docker?
Depends on what out of box experience you want and if you want a GUI. For an easy out of box experience, open source, GUI based tool I suggest checking out https://github.com/utmapp/UTM. There's also an app store version that supports the author I believe.