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Hopefully by now you've taken this to a repair tech. Yes, the handwheel is supposed to be removed but it takes specialised knowledge to safely do so and restore the machine to working order.
The problem is that there is a little gear (and it sounds frozen) inside the middle knob that has to go back on the machine in the right position (and it's really hard to figure out if you're not trained!) or else the machine won't work. And the potentially frozen gear might be frozen because the bobbin gear further into the machine is 'dead'.
So a repair tech is the only person who should be taking apart a sewing machine. But good on you for having taken photos - did you take 'before' photos too? Having done so means you might be able to put the machine back together well enough to prevent 'basket case' charges - the extra money a repair tech charges to put back together a machine an untrained owner has taken apart to try a little DIY on.