"The OWC is not USB-C compatible. Sierra is Mac OS extended. I dont know if APFS on Catalina will see that drive."
Your post makes no sense.
If it's USB, it should be recognizable to the new iMac.
You WILL need an adapter or dongle to convert the USBa plug to USBc.
I'd suggest something like this:
The Cable Matters USB 3.1 Type-C to Type-A adapter provides a convenient connection between the newest devices with USB Type-C and legacy USB peripherals with Type A. It adapts the Type-C port on a computer to connect all legacy equipment, peripherals, cables, hubs and chargers that ...
www.amazon.com
Since you haven't received the new iMac yet, here's how you do it:
1. When the new iMac comes, take it out of the box, set it up, but DO NOT PRESS THE POWER ON BUTTON YET.
2. On the OLD iMac, run your "last CCC update".
3. Take the backup drive and connect it to the NEW iMac.
4. NOW press the power on button.
5. Begin setup. At the appropriate moment, setup assistant will ask if you wish to migrate from another Mac or drive. YES, this is what you want.
6. Aim setup assistant at the external backup, and give it some time to "digest" everything. It will take a little while.
7. Setup assistant will present you with a list of stuff to migrate (apps, accounts, data, settings).
I suggest you migrate all of it.
8. The migration will take a little while, so again be patient.
9. When done, you should see your "old login screen" on the NEW iMac. So log in and look around...