Would Love Your Help - imac from 2011/2012 gets to apple logo loading - then freezes on a grey screen

If it works as expected in Safe Mode the first place to check would be your Login Items. Go to System Preferences > Users & Groups > Login Items and disable them by choosing them and then using the (-) button. You can always put them back with the (+) button. Then restart and test.

you either have an early 2011 , late 2011 or 2012 iMac not multiple. Save your data should be your priority off that internal drive. Also if that drive is the original drive then instead of buying a new Mac why not just replace that drive assuming everything else is fine. Macsales.com ie OWC can do it for you at not so great a cost.

If the internal drive is clicking then it will just continue getting worse. It may even affect your ability to boot the iMac sooner or later and will need to be removed.

Even though you already replaced your external boot drive, you can check the health of your hard drive using a utility such as DriveDX. It will also continually check the health status and alert you at the first sign of trouble for many common failures.

Your question is perfectly legitimate and I should have provided a better explanation. While the drive began to fail years ago, it is still powered on and spinning. The failure can get worse or it can begin experiencing other types of failures which is indicated by the clicking or clanking noises you are hearing occasionally. What can happen as the failure worsens is that macOS may start getting stuck whenever it looks for possible storage volumes to load & save files. This is even worse at startup & waking from sleep since the system can completely hang while trying to locate the boot media and while it is communicating with all connected hardware. With the internal drive making noise, the internal drive may get stuck trying to initialize itself and be unable to communicate with the iMac or macOS and so the boot process may stall, perhaps completely. Just be prepared.

You don't want DriveDX monitoring the failed internal drive as it may just flood you with error notifications. I referenced DriveDX so you could use it to verify the health of the old external drive so you would know whether it is still Ok to use it and to alert you as early as possible to a problem if the drive ever does begin to fail.

The clicking sound on startup is most likely the internal drive as it is trying to spin up and initialize especially since you already know it is bad, but there is always a chance it could be something else such as optical drive or fan or speaker noise.

If you do take the iMac to a professional to remove the drive, you could have them install your current external drive since you've been using it already. Or you may want to consider having an SSD installed instead to help improve performance and extend the useful life of the iMac. One thing to remember with SSDs is that they can sometimes fail without any warning so good verified working backups is more important than ever.

If a non-Apple drive is installed internally, then make sure they use an adapter which includes a temperature sensor so your fans run at the proper speed. OWC provides such an adapter. Some iMacs from 2010+ utilize an internal thermal sensor inside the original Apple hard drive so when a non-Apple drive is installed you need this special adapter which includes a thermal sensor so the iMac gets the proper thermal readings to control the fans. Otherwise the fans will run at high speed all the time. Apple will only install a new Apple drive with the same specifications as the original, but an independent Apple Authorized Service Provider may install a third party drive for you.