“undoing the protection should include filling in a password” That sounds like an encrypted drive. There are USB keys that’ll require software to enter an encryption password before you can do anything (including deleting the contents).
If you’re on Windows, try Bitlocker or Veracrypt. You can create hard disk images that can be mounted temporarily with a password.
Same can also be done on other operating systems, though I don’t know what tools yours come with.
In a pinch, you can just create a password protected 7zip archive, though viewing and editing those files usually involves a temporary copy.
There’s no way to prevent a file that’s loaded in memory from making it back to the disk. The best you can do is also encrypt the system drive so only people who know the encryption password can boot the computer that’s accessing these files.