If you ever do need to initialise a disk from High Sierra you can use the terminal to make APM disks still.
diskutil partitionDisk /dev/disk3 1 APM HFS+ TheDisk 0b
where disk3 is replaced by what the external disk is, that you would find by
diskutil list
And then both OS's will recognise the disk. It will show up on either desktop of the machines, and you can read & write to the disk from either OS.
That's really the best way to do it, but keep in mind that OS 9 supports a maximum partition size of 128Gb. Drive Setup doesn't really like USB drives, tho the classic Mac OS will prompt you to eject or initialize a disk at boot time if it can't read it, it's not part of Drive Setup, it's part of the OS, however I don't think it will allow you to create partitions.
Likely, this was the trouble you were having with a 500Gb drive. It would need to be partitioned.
Under OS X, Applications>Utilities>Terminal.
diskutil list
diskutil partitionDisk /dev/disk1 2 OS9Drivers HFS+ MacHD 128000M JHFS+ OSXHD R
That would give you two parftitions, on named MacHD formated HFS+ with a size of 128Gb, and another named OSXHD formated JHFS+ that used the remainder of the drive. As noted, replace /dev/disk1 with the disk number of the drive you want to partition.
Likely you can replace 128000M with 128G, I haven't tested it, but it should work.