How can I build a cheaper, upgradeable Windows build machine?

The small-form-factor parts are likely driving up the price. A micro-ATX B550 board, a standard case, and a good 600 W ATX power supply could save a significant amount compared with the compact setup. A 1000 W PSU also seems excessive for a system that currently has no graphics card and is expected to use far less power.

The simplest way to reduce the total is to change the case and power supply to conventional, non-SFF models. That should lower the cost without sacrificing upgradeability, and standard ATX parts are generally easier and cheaper to replace later.

For a build machine, prioritize dual-channel memory and enough RAM before spending heavily on compact components. The Ryzen 5 5600 is usually a better choice than the 5500 for a modest price increase because it has more cache and PCIe 4.0 support. If parallel builds are important, a Ryzen 7 5700 adds two more cores. A 1 TB SSD with a DRAM cache, such as the KIOXIA Exceria Pro, would also be a sensible choice for frequent build workloads.

You could also look at an older Ryzen processor, especially if you find one used or discounted. For a machine focused on unattended builds and background tasks, putting the savings toward more memory may provide a bigger practical benefit than buying the newest CPU.