I have a mid-2015 i7 MBP with 16GB of RAM that sits on my desk next to the Mini... and the M1 Mini smokes it in every. single. comparison. My Mini is connected to an LG 34" widescreen monitor, so it's essentially two monitors in one housing and I shifted to it primarily because I wanted more monitor real estate than the MBP could give. The latest macOS releases have rendered the MBP "below the mark," and I was just discussing with my son last night that I will probably replace it with a 12.9" iPad Pro with Apple Silicon because the Mini has performed so well as my daily driver. If you decide to purchase the Mini, keep in mind that you may also be looking for a monitor, keyboard, and mouse. I had all those things from my previous mini, so my upgrade cost was limited.
I, too, was a little concerned about the reduced amount of RAM, but I have found it to be more than adequate for my use. As for the speed of the RAM, the architecture of Apple Silicon has demonstrated that there is more to memory performance than speed. I was also concerned about storage since my MBP has 512GB and the old i5 Mini had a 1TB mechanical drive, but I have shifted to storing photos and documents in iCloud after upgrading to Apple One. That enabled me to retire my local Network drive and its inherent network vulnerabilities, so the 256GB SSD has been more than enough.
The M1 Mini has been out long enough to make pricing more appealing, which is always the most important for me. I can't tell you if you should wait for a "new" Mini model, but I can't imagine how you're dealing with the performance of a 10-year-old iMac, considering the abysmal performance I saw from my 8-year-old i5 Mini.