You are looking for the field property AllowMultipleValues which you want to set to $true.

Set-PnPField -List $list -Identity $InternalName -Values @{LookupList=(Get-PnPList $ParentListName).Id.ToString(); LookupField=$LookupField; AllowMultipleValues=$true}

FieldLookup.AllowMultipleValues property

You are looking for the field property AllowMultipleValues which you want to set to $true.

Set-PnPField -List $list -Identity $InternalName -Values @{LookupList=(Get-PnPList $ParentListName).Id.ToString(); LookupField=$LookupField; AllowMultipleValues=$true}

FieldLookup.AllowMultipleValues property

If you want to add additional columns related to the lookup-column, I think the only way is to do it using Add-PnPFieldFromXml.

Create lookup field with additional columns