"The command didn't work - I've made a bootable USB drive but the installer is saying I don't have enough free space to install Sierra - what do I do now?!"
You can't boot from the Mac, right?
But you can boot from the USB flash drive, right?
But you CAN'T reinstall to the iMac, right?
OK.
Get a external hard drive, or even a larger-capacity USB flashdrive.
Boot from the install flashdrive, and choose to install a new OS onto the EXTERNAL drive.
Get the external drive up-and-running however you can. You want an external drive that is fully-bootable to the finder with a new account on it.
When you have that done, you'll have a way to boot the Mac.
If you can get it booted, you can then do this:
1. Extract whatever apps and user files you can from it (perhaps copy to the external booter drive)
2. Now, you can boot the Mac from the USB installer, use Disk Utility to re-initialize the internal drive, and then re-install a fresh OS onto it.
3. Then, you can use the stuff you saved on the external drive to re-construct the MacBook's internal drive.
Ahem... in the future, just leave the DVD player app there...