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The decision is yours to make. You didn't say if power consumption is important - if you keep the server on 24/7 it could be relevant. It's hard to say if you can modify the server, to make it quieter. Or if you can salvage parts. Or if you need all the CPU performance of a server CPU.
If you want to keep it or salvage parts: In my experience the fans are the noisy part of a server. I don't know the form factor of the main board or the case. I really can't say which parts you can keep and which need replacing.
120mm fans with pwm are better than 40mm fans at full speed. Bigger heat sinks, too.
If not: You can always try to sell the server and get a low power single board computer with enough (32GB+) RAM instead (hardkernel h4 or a cheap chinese alternative). IMO a celeron N is fast enough to run multiple VMs (or better: containers). The limiting parts are RAM and storage. Things like transcoding videos will take more time than on a server CPU... But immich and an *arr stack will work flawlessly for a one or two user instance.