As far as the base model versus the 4k model, do you have an Apple Store near you so that you could see the difference in real life? It's really a personal preference and budget, unless you have a technical need driving the decision.
The storage is going to make a pretty big impact to the performance of the iMac. As maflynn stated, SSD is really the way to go. Unfortunately, that gets really expensive in the Apple world. The next step down from SSD is the Fusion drive, which is a combination of a tiny SSD and an old school hard drive. The tiny SSD improves speed to make the computer feel faster, without spending the money for a full SSD. The base model has a slow 1TB hard drive with no speed boost from SSD technology. It's slow, but it will work.
With your need for 1 TB of storage, you could get the iMac with an internal 256GB SSD to and then plug in additional storage externally into the USB 3 or Thunderbolt ports. This would be the option that I recommend as you will have a better performing iMac.
Lastly, I would recommend going for 16GB over 8GB for RAM. Apple charges a lot for this, but I don't think you can add it after the fact on the 21" iMac so you have to get it when you order it. The 256 GB SSD and 16GB of RAM should give you a computer that will last you many years with decent performance.