iSCSI Share for Windows Guest VM

I am trying to help a local small business get their backups running again (their target ran out of space and money is an issue). Here’s what I’ve got to work with:

  • Server with x4 7TB drives and two 1GB NICs running TrueNAS Core. (1 NIC for management, the other NIC for iSCSI traffic)
  • One physical switch with a VLAN setup for iSCSI traffic (again, no budget for another switch)
  • One vSwitch in vSphere
  • Small VMware 6.5 environment with a Windows 2016 guest running Veeam Backup & Replication 12.

Create an iSCSI share in TrueNAS tied to a pool that will be used by the virtual Veeam server as a backup target.

Should the guest VM or ESXi host initiate the connection?
I’ve read that it is preferable to format the volume being used as the backup
target as ReFS but if ESXi is the initiator I won’t have the option to do that. I’ve
also read that using the guest as the initiator is not a great option. So I don’t
know how to go about doing this.
I think that regardless I will need to add a second switch in vSphere for the iSCSI network. Is that the case?
If ESXi is the initiator there are a bunch of steps that I need to follow to set that up.
If the guest VM is the initiator do I just configure the switch for the iSCSI network and add a second NIC to the guest?

I’ve got pretty fundamental questions and a appreciate your answers and anything more you can tell me about just the basic setup to help me achieve my goal.