An overfull hard drive poses a significant risk to your data. A basic rule-of-thumb is that you need to keep at least 10% of your HD space free for the OS to use for things like temporary files, caching and so on.
You can move your iPhoto Library very easily. Get an external USB drive (and remember you'll need a second one for back up)
Make sure the drive is formatted Mac OS Extended (Journaled)
1. Quit iPhoto
2. Copy the iPhoto Library from your Pictures Folder to the External Disk.
3. Hold down the option (or alt) key while launching iPhoto. From the resulting menu select 'Choose Library' and navigate to the new location. From that point on this will be the default location of your library.
4. Test the library and when you're sure all is well, trash the one on your internal HD to free up space.
Going froward, iPhoto is dead. It has not been developed, sold or updated for more than 5 years now. The newer Photos app comes with the OS and is an easy transition. There are plenty of 3rd party options too.