I use a Synology NAS currently with 2 x 3tb WD RED HDDs in RAID 1. Plus an external USB HDD.
A NAS is nice for several reasons.
1. Its not just limited to the Mac. Any device can access it even game consoles like Xbox and Playstations, smart tvs, iPhone, iPad, etc.
2. Use it for Time Machine or other back up services for Macs and Windows.
3. Works as a convenient go between for Windows (NTFS) and Mac (HFS+ soon to be APFS).
4. Easily upgradable for larger HDDs.
5. Filled with tons of tools. Monthly drive health test are run and emailed to you. If you see a bad sector you can swap out the drive and allow the NAS to rebuild the RAID with no effort or data loss.
6. A nice enough NAS can function as an awesome little media server (Plex for example) and transcode the data server side so you can through any and all media at it and play it to any an all devices.
7. Easy RAID setup and management for data redundancy, speed or both (need more than a 2 bay NAS for both).
8. Away from your computer making it less likely to be damaged if something affects your iMac or room its in i.e. theft, small fire or water damage, etc.
9. Overall just a ton of flexibility and very few limitations.
I guess some of the downsides could be speed, it will fluctuate depending on network settings and congestion. Ease of use, while they make it easy it will require some effort, learning and understanding on your part. While not necessary its helpful to learn all the basic terms like SMB, DHCP, FPS, AFP, etc and learning how Users, Groups, Shared Folders, Quotas on the folders etc and how to leverage them to your benefit. Needless to say its a powerful tool to have on the network.
For example I have a Time Machine user specific password for a Time Machine folder with a 1tb data quota (limit). So effectively time machine only sees that 1tb and can't use anymore so it doesn't fill up the drives.
I guess I should mention a NAS shouldn't be your ONLY back up even with RAID 1. A portable external drive is still nice to have. I use them for manual back ups (just drag and drop important data). I have 2 external portable HDDs, I keep one at a friends house in his safe (encrypted of course) and one in my safe at home. I'll update the one at my house and swap them out occasionally when I goto my buddies. He does the same. That way in the event one of our houses burns down, robbed, etc. we still have a our irreplaceable data. Online sources isn't a bad idea either but I haven't ventured into that yet.
That said if you just need more space. I would look into a quality external USB SSD like Samsungs T3. Velco it to the back of the iMac and call it a day. You already have an internal SSD for booting and core apps, no reason to make it too complicated. The T3 will be lightning fast, silent, not overly expensive (depending on size), and small.
Here is an Amazon link to the T3.