Why did many US military designs start with letter M?

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I believe in the case of the US Army it stands for 'Model', but the difference between 'Model' or 'Mark' is fairly trivial. 'Mark' is usually abbreviated to 'Mk' - usually in the British Army though it appears in certain US designations as well - especially the US Navy.

Yes it's confusing and caused problems in WWII as an 'M1' could refer to a number of different small arms, vehicles or other equipment. In practice, even equipment with the same 'M' number had a unique code only usually used by the Ordnance Corps and the most popular types were given nicknames by soldiers. In the case of tanks, this became standard practice after the US Army made the British habit of naming American tanks after famous American Generals an official designation.

All militaries use some kind of identification number system for their equipment with varying levels of standardization. For example the German Tiger tank was also the "PzKpfw VI Ausf. E" with ordnance number "SdKfz 181" even though it was almost always just called the Tiger.

Other numbering systems might be easier to differentiate but it doesn't make them any more logical. The famous Russian T-34 tank wasn't first built in 1934 nor was it the 34th design, the prototype just had 34mm of frontal armour.

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