How to make automator app use a specific folder as input
Apple's documentation on files is a bit of a laundry list - but read a little so you can decide if you want to use POSIX names or native names. POSIX uses / and native uses : to denote folder breaks. The following two lines are both the Downloads folder for a user with a short name of me:

"/Users/me/Downloads"
"Macintosh HD:Users:me:Downloads"


Mac Automation - Files and Folders - Apple Developer

On the left sidebar are links to sections dealing with Processing dropped files and folders as well as the concept of watching folders.

I would try my hand at writing a script that uses the built in watch folders triggers so you don't have to deal with passing file names or starting and stopping the script. If that doesn't work, you could always invest in a tool like Hazel that does what you want as well, but it's good to try and learn automation since it's so powerful long term.