2. Im trying to create custom cluster (with "External") option chosen,, But the rke2-server not starting on the Virtual machine. Journactl shows that the server failed to start. any idea?

When you say "custom cluster" are you creating a custom cluster through Rancher?

yes

Are you providing a cloud provider config to the Rancher UI?

No

If you are specifying an external cloud provider, then you should provide a cloud provider config. https://rancher.com/docs/rancher/v2.6/en/cluster-admin/editing-clusters/rke2-config-reference/#container-network-provider