exo wrote in reply 13 above:
"at some point I will replace this and when I sell it I want it to have a bootable system on the HDD for someone else to start from"
Worry about that bridge when you come to it.
For now, boot and run from the external SSD.
When it's time to sell the iMac, do this:
- sign out of iTunes, iCloud, "find my Mac", all of these things.
- then, boot to INTERNET recovery (command-OPTION-R at boot)
- open disk utility, go to the view menu and choose "show all devices".
- ERASE the ENTIRE internal drive (should be "top line on the left")
- Use the installer to install a brand-new copy of whatever OS it offers you
- When the install is done, DON'T go through the setup. Just quit or if quit doesn't work for you, reach around and hold in the power on button until the iMac shuts off.
- It's now ready for the new owner.