That drive that you see now called "media" is your hard drive. You will see in the picture that shows the device info that Capacity is listed as 0 (zero), so there's no space there for you to install anything. It's also a common displayed fault, and that fault is a really good symptom of a
failed hard drive.
So, your next step is to replace the hard drive. There's good instructions to do that on iFixit.com. You will need some common tools, and some time to do that (also a new replacement hard drive

)
This should be the correct guide for that job:
https://www.ifixit.com/Guide/iMac+Intel+20-Inch+EMC+2105+and+2118+Hard+Drive+Replacement/1092
I'm assuming a 20-inch iMac. If yours is a 17-inch, the repair is very similar, but there is a guide specific to 17-inch, just go to the listing of guides at that same ifixit.com site.