I would recommend at least double your internal storage drives capacity, that way you can guarantee an older version of files will be available even if your internal drive is near full. If you need external drives for other purchases, use physically different drives, me, I wouldn’t risk my backup.
I wouldn’t recommend partitioning it for use with other things, if you screw it up, there goes your backup.
I would recommend using different types of media if possible, but if using only a single backup, an HDD is fine, but an SSD is best, as if dropped it is (much) more likely to survive with the data intact. Also an SSD will complete backups faster. But since you have an iMac, you would be able to leave an HDD plugged in all day.