The Option Agreement mentions the valuation at next round of investment i.e. 2021 - will the option to purchase always be at 20% below that 2021 valuation, even if exercised in 4 years' time, or does it update if we are say Series B by 2024, as an example? 

Yes, the valuation will be set up from the 2021 valuation (with a 20% discount), but the option will be fully diluted considering the further investment rounds. We often see the value of each option equate to 1% or less upon exercise.