running OS X 10.11.6 but doesn’t allow me to update to 10.15 or later.... why?

This is correct. The last version of OS X compatible with your iMac 2007 is indeed OS X El Capitan 10.11.6. You would need a more recent iMac to be able to use more recent versions of macOS.

Correct. You need a newer model, but not a brand new one.

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To be able to use macOS Catalina 10.15, your iMac needs to be a late 2012 model or more recent.