Hi Jason,
The desired setup you describe is remarkably similar to my current setup on my Macbook Pro, so hope this helps ...
First, I'll describe my setup which is slightly different from yours. Then, I'll describe, to the best of my knowledge, how to achieve your exact desired setup.
--------------------- My setup -----------------------
My thought process was very similar when coming up with distribution of storage. I wanted to have my OS, apps, and frequently accessed/modified (small) files on a quick storage device (SSD), and larger unchanging files on a much larger (but cheaper) device.
I went with a 250 GB SSD for my main drive, which has OS X and all my applications on it, in addition to coding projects I frequently work on (for fast loading/saving).
For my larger storage, I went with a 2TB SSHD (hybrid) drive, which I installed in the optical bay (took out the DVD drive, and utilized its SATA connector for a 2nd spinning drive installed in an optical bay caddy).
Then, I left /Users on the SSD, but created a bunch of symbolic links (using ln -s) to point the various system folders to my larger drive (for documents, movies, pictures, etc), but kept other parts of /Users on the SSD (such as library and desktop). I had to do this via the command line, as Finder wouldn't let me delete the existing system folders (Movies, Music, etc). I had to resort to some sudo rm -rf.
So, in other words, it is possible to split up your user home directory into 2 parts: 1 directly on your SSD, and the other on your larger storage, via symlinks from the SSD to it.
To demonstrate my folder structure, this is the output I get from doing an ls in my user home directory on the SSD (note the symlinks).
MacBook-Pro:~ kven$ pwd
/Users/kven
MacBook-Pro:~ kven$ ls -l
total 48
drwx------+ 5 kven staff 170 Jun 9 05:43 Desktop
lrwxr-xr-x 1 kven staff 23 Jun 7 22:52 Documents -> /Volumes/SSHD/Documents
lrwxr-xr-x 1 kven staff 23 Jun 7 22:52 Downloads -> /Volumes/SSHD/Downloads
drwx------+ 63 kven staff 2142 Jun 8 16:43 Library
lrwxr-xr-x 1 kven staff 20 Jun 7 22:53 Movies -> /Volumes/SSHD/Movies
lrwxr-xr-x 1 kven staff 19 Jun 7 22:53 Music -> /Volumes/SSHD/Music
lrwxr-xr-x 1 kven staff 22 Jun 7 22:53 Pictures -> /Volumes/SSHD/Pictures
drwxr-xr-x 16 kven staff 544 Jun 9 02:47 Projects
drwxrwxrwx+ 6 kven staff 204 May 18 15:54 Public
drwxr-xr-x@ 2 kven staff 68 Jun 4 05:16 dwhelper
lrwxr-xr-x 1 kven staff 13 Jun 8 05:50 sshd -> /Volumes/SSHD
(SSHD is my 2nd and larger drive)
Now, for your 2nd drive, you could either have it external or use a 2nd internal drive. I don't know if iMacs these days come with an optical drive you can switch out, but if so, then that could be an option. If not, external is fine.
I've attached an image of this setup.
--------------------- Your desired setup -----------------------
You should be able to do exactly what you want - point the whole of /Users/username to an external drive, again through symlinks. Do this in phases.
1 - First, create a replica of your /Users directory structure on the external drive, without yet pointing your main /Users directory to it.
2 - Then, go to your main drive, and, in your /Users folder, I think you'll need to rename your existing users directory (not sure if Finder will allow it, but you should be able to do it with sudo on the command line).
3 - Finally, create a symbolic link to the external /Users/username folder, on the main drive under /Users. So, you will then have something like this on the main drive.
Contents of /Users:
username_renamed (your old user home directory, renamed so that it doesn't conflict with the new symlink below)
username -> /Volumes/ext_drive/Users/username (a symbolic link to the directory on your external drive)
I haven't tried this exact setup before, but I'm sure others have.
------------------------ A word of caution -----------------------
If you decide to have your user home directory entirely residing on an external drive, if that drive then got physically disconnected, unmounted or ejected unexpectedly, the system might crash/freeze because it is not able to access your user home directory.
So, I would avoid putting the whole users directory on an external drive, unless you're absolutely sure that it will remain reliably connected the entire time. If it does get disconnected for whatever reason, you may experience serious issues, I would think.
Alternatively, go with my approach, pointing parts of your users directory to the external drive but having your main users directory physically residing on your main drive. Or, use an *internal* 2nd drive for the user home directory, as opposed to an *external* drive.