IMy question is, does it make more sense to go with the Fusion drive and keep everything on board, or get the SSD, and keep all of my photos (and music and video files) on a 2TB usb drive?
Look at it this way: is 1-2TB going to be all the storage you'll ever need? If you're doing wordprocessing, email, snapshots and cat videos from your iPhone then, probably, yes, and an iMac with 1TB inside will do you proud (even the 24GB 'Fusion' will probably be enough to give you fast boot and application loaded goodness).
If you're doing serious amateur photography, video that lasts longer than it takes to say "meow!" or build up a substantial movie library then heck, no, you're going to burn through 1TB in a year or less: you're going to need some sort of additional storage, whatever happens.
If you think about it, would you rather have a fixed, limited amount of storage inside your machine, or be able to flexibly mix and match external and network storage as the need arose? Sure, having storage built in to the machine means that all your photos and movies go where your machine goes... unfortunately that includes going
with your machine if it has to be repaired. It also means that you have to take your machine anywhere you want to take your data... as opposed to simply grabbing a tiny external HD. Or, if you have several computers in the house, you could also look at a NAS.
In a way, having lots of internal storage is more of an issue for a laptop (which you'll
want to carry around) than for a desktop (where having your data transportable by sneakernet is an advantage - never underestimate the bandwidth of a briefcase full of hard drives).
USB 2 and Firewire used to be the bottleneck there - the only way to get really fast transfer was to use an internal drive and hook up via a parallel cable. Now we have USB3 and Thunderbolt - both faster than any single mechanical hard drive. Even Ethernet is now gigabit, and WiFi is far faster than it was, so networked mass storage is feasible for anything short of large video projects.
So, I think with an iMac I'd keep it spinning-rust free and go for a 256 or 512GB SSD - enough for the system, your software and your 'work in progress' projects, and supplement it with external storage as needed. Of course, you'll need an external drive for backup anyhow (ideally 2: one Time Machine backup for accidental deletions, one complete disc image for disaster recovery).