I used to have the same problem until I turned all the way down the brightness. Sometimes I go up one or two dots but, no more than two. I'm about 19" away from my screen.
No closer than an arms length away for a screen of that size. Your eyes should be level with the top of the imac screen. Reducing the brightness will help as well.
Did you just buy the imac? I experienced a similar problem with my 27' imac, but it went away after about 2 weeks. I assume it is my eyes getting accustomed to the glare of the screen?
For my iMac (which is 21.5"), I found increasing the icon sizes and increasing the font sizes work best. Some of my icons are 3/4" wide (ya, that large) and some of my text is 18 point (ya, that large). Larger icons and larger text means easier reading. I can actually "speed read" large text much faster then "tiny little - eye strain" pixels on the screen. LOL. Seriously.... As a suggestion, try pressing CMD + "+" and CMD + "-" (for increase font and decrease font) within a few applications. Larger items (icons, text, screens, etc.) might work for you as well...
Agree. My iMac screen is arm length away (using flat knuckles for my longer then normal arms) as well. For average arms, finger tips touching is great distance check.