VM/serverless with cleartext SSH private keys that can be used to access VMs with high privileges

Hello.

If you are using AWS, there may be connection methods available that do not require SSH private keys, so why not consider switching to one of those?
For EC2, it depends on the OS, but you can use Systems Manager Session Manager, etc.
https://docs.aws.amazon.com/prescriptive-guidance/latest/patterns/connect-to-an-amazon-ec2-instance-by-using-session-manager.html

If you absolutely need SSH, it's a good idea to register the private key in AWS Secrets Manager or Systems Manager Parameter Store so that you can download it when needed.
If you register it in AWS Secrets Manager or Systems Manager Parameter Store, you should also be able to restrict who can use it with IAM permissions.
I also think it would be possible to implement a mechanism to periodically update the private key.
https://github.com/jakebenn/aws-key-rotation-scripts/tree/master

Apart from Riku's answer, you can also create a new user with password (for example, user: admin, password: p@s$w0rd.12) using userdata. This will create the user when the EC2 is launched. Then, login to the system and change the password of the user. You can also have the password in secret manager and obtain it from there, so it won't be visible in the userdata.

Alternatively, you can create a base image (golden image) and have the user details already in it, Upon launch, login and change the password.

Once you have the password, you can login using ssh or EC2 serial console.