TLD matters to a certain extent. What is your main woe is that the name itself is already taken, so particular TLD (.com or any other) doesn't matter that much. Which TLD to pick is entirely different concern. It largely depends on your target market. Unless your target market is niche specific, tech savvy or limited to a certain geography, .com is a given.

I would say the target market is b2b tech savvy. Is there a risk in proceeding with .io, .in or .ly ?

.in avoid. Depends on the space. If ai use .ai. .io .ly could work as general hype tld

Make sure .com owner doesn't hold related name copyrights and trademarks.

Then - the typical concern is that your potential customers will start typing "YourBrand".com instead of "YourBrand".blah and .com owner might as well decide to redirect traffic to competitor or do other unhelpful activities.

Depends on your audience.

If you're marketing to tech savvy customers, probably won't matter much

Plenty of apps use .ly, .io and the like. No big deal

If the rest of your branding and marketing is good, probably not a decision to lose sleep over

But again depends on your audience

Could it be easier to change the name of the product?

Unfortunately a lot of effort has been put into finalizing the name. We are exploring.