Questions about how to implement interaction

When a character approaches an object

You can manipulate the object by pressing the interaction key.

There are multiple objects, and although the operation keys for each object are the same, the operation methods are different.

Here is my opinion:

Go closer to the object << Implemented through collision handling

Manipulate objects << Implemented through OnPossess (implement separate operation keys for each object)

And the opinions of other team members

Go closer to the object << Implemented through distance calculation

Control the object << Only change the state and control keys are implemented using the controls bound to the character.

Sorry, the sentences may be awkward because I used a translator.

Both method are fine, first method might be easier, you can just add camera to your object bp such that when you possessed it, it will focus on that object.
You can also just swap enhanced input in case you are using 'translate/scale etc…" of the object.