Google stores an app password in your email client, not your actual password. When you change your password, Thunderbird needs to receive the updated password. I suggest clicking to settings>privacy&security to delete the current password and then pursue getting the new one. After you respond to the Google prompt, Google will store a new app password in thunderbird.

Google is asking for 2-step verification but is not allowing me to use the simplest of verification - a text message. That option is grayed out.

Google are offering multiple ways to sign in. Go to your Google account and select Security - How you sign in to Google. https://myaccount.google.com/

Pick the method which fits best for you.

Can I make changes directly in Thunderbird and this imap and avoid this Google nonsense?

No, you can't. And it isn't nonsense, it's in you best interest.

Hello there

Make sure that you are using a strong password. Be sure that passwords are good and strong and twelve characters long at least here. The use of uppercase and likewise and also add there some symbols. Avoid to use personal information in that password and no dictionary spells there to. If you are doing oké ,consider to get a master password as Thunderbird user.

Greetings googlethunderbird.