Internal microphone extremely quiet
It sounds like a hardware failure, however if you have the ability create a boot drive for yourself and try starting up off the fresh volume to test the microphone, that would be ideal.

If you don't have a boot drive ready yet, you can try creating a test user account to try the microphone under.

Check the drive using disk utility, just in case as well.

I have a faulty microphone on an iPad that acts the exact same way -- physical taps and bumps will be picked up but nothing standard. I suspect the microphone unit fell out of place, something shorted out, or something physical damaged it.