Try upgrading from macOS 12.1 to 12.4; there were some issues in 12.0 and 12.1.
Audio Distorts Then Completely Stops
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Thank you Pulse!
I also found some helpful info on Serato's web page and on YouTube regarding Serato optimizations. Some of the issues could also be related to background processes running on my laptop, including Spotlight indexing, etc.
After following many of the recommendations, things seemed to have started working. I was thinking of updating to 12.4 anyway, so I might as well do that before I put too much into Serato :)
Thanks again for the help!