I’ve often found it is good to start again with builds sometimes, as you can often end up with orphaned, or incorrect build projects.
Work through the steps here https://forum.cardano.org/t/upgrade-to-1-35-4-for-coincashew-users/
Making sure you’ve got a clean/new folder for cardano-node2 (or whatever you want to call it). The cabal update command later on will update cabal for your build.
I would make sure you check the cabal.project file before you move to the actually build command.