My DKB High density disk drive attached to my SX-1 booted plenty of A500 floppy-based games. It's as compatible as booting from an A1200.
Making a boot CD with Workbench on it is a great idea.
I have gone the 2.5" hard drive method and installed Workbench 3.1 back in 1994(5). However, the SX-1 connection to the CD32 is shaky... A CD may be better! Ofcourse I've been recommending a "LIVE" CD for consoles based on AROS-Max for a long time.
My CD32 setup may go up for sale in a few months... It has 8MB of EDO ram installed in the SX-1 along with a 121MB hard drive and a cable that supports a second external 2.5" drive. At one time, I have an external enclosure that adapted a 3.5" driver to that 2.5" cable but I have no idea where it is.
Alot of CD32 games run better with this RAM installed. UFO is a bit faster as is Liberation. Castles 2 is another title that benefits from it. Gunship 2000.
The best part about hooking up a hard drive via an SX-1 or SX-32 is that you can save to hard drive instead of NV-RAM. NV-RAM fills up quick.