Applications on windows RARELY install to appdata unless you MAKE them. The problem is no matter where u install them all the users have access to the program through the shortcuts the install will place everywhere, so then it becomes a game of deleting the shortcuts from all the other users desktops and start menus. however after that the programs can be completely separated.
in General, you can separate the files between the accounts since the documents, desktop, and downloads folders are in their own user directory so thats all fine.
tbh u should not need to install a second OS which is a hassle because you have to then maintain both. and settting up a VM just for this is a paint especially on linux...it is doable and will solve most of your problems if you really want to go this route tho.