I haven't come across a modern drive that wouldn't work with the A1200, but of course haven't tried them all... But like others have said, a CF card and adaptor are very cheap these days, and probably more than you'd ever need!
If that external floppy drive works, you should be able to connect it to the A1200 and boot from it - the OS doesn't really discriminate between drives, only some games do and require running from the internal drive...