Thanks for the feedback!
I’ve assembled the circuit on a home-made PCB. It is partially working now, but I’m seeing an output of only 4.52V with the Arduino connected. After a few seconds, the voltage drops further to about 4.48V, and the MOSFET becomes extremely hot. Regardless of the potentiometer setting, I cannot reach a higher output voltage.
I can also hear a high-pitched noise coming from the circuit, which suggests the NE555 might be oscillating. (I think so)
I have already ordered the CMOS version of the 555 timer. Do you think this will help, given the low input voltage?
What else should I modify to make this circuit reliable? Is it possible to save this design by changing component values? Also, would it be a better approach to connect two 18650 batteries in series (~8.2V) and convert the circuit into a step-down converter instead?
I’ve attached the updated LTspice simulation file, which now includes the specific SPICE models for both the MOSFET and the diode. I believe I have modeled them correctly, but I am not entirely sure.
I have also included a PDF of the full schematic for reference.
I’m finding this project very difficult and it's becoming really exhausting to troubleshoot

, so I am really grateful for any help you can provide.