Does the iMac 16,1 have a M.2 Slot?

No, Macs do not have M.2 slots. Apple uses a proprietary PCIe SSD connector for their blade style SSDs.

If you want to use a third party upgrade SSD in an iMac, then OWC makes a drop in replacement to fit the Apple proprietary SSD connector, plus OWC provides support for their SSDs in a Mac.

Technically It is possible to install a standard M.2 SSD internally, however, you will need to use a special SSD adapter from Sintech to allow an M.2 SSD to be used internally (that is the only brand which seems to have the best reputation for compatibility & reliability). However, the M.2 SSD manufacturers will not support you if there are any problems while the M.2 SSD is installed internally in a Mac. Not all SSDs are compatible with all computers or devices.

If your iMac did not ship with a blade style Apple SSD from the factory, then you cannot install any blade style SSD in the Apple proprietary SSD connector since that SSD connector if it even is installed, will not be activated.

OWC sells SSD upgrade kits with all the tools & supplies needed to perform an upgrade and they have clear information on possible upgrades possible along with video instructions showing the process. Plus OWC mentions the need for having at least macOS 10.13+ already installed before a third party NVMe internal SSD can be used. You really should already have installed macOS 12.x Monterey before installing a third party NVMe internal SSD as well since the Monterey installer will refuse to install unless the Monterey installer had already updated the system firmware. Plus OWC has great support.

Keep in mind while the OWC video instruction can make the upgrade process seem easy, it is very difficult since every internal component must be removed to access the blade style SSD connector. There are a lot of chances of accidentally damaging something. OWC themselves highly recommend a professional technician to perform the upgrade. Most forum contributors recommend people just use an external USB3 SSD (which supports UASP) as a boot drive which will give you about a max transfer rate of 500MB/s....the same as a SATA III internal SSD.

Most do not. Only models that shipped with either an SSD or Fusion drive have an SSD blade slot (custom Apple connector, but M.2 adapters exist).

If your iMac has an HDD only it does not have a slot.

Regardless, I would suggest using external USB3 storage rather than worry about an internal SSD upgrade. External drives are fast enough for typical use, and if you need faster you probably also need a mac that is newer/better than a 16,1.

MacTracker indicates that an iMac16,1 is an iMac (21.5-inch, Late 2015). It has only a 2-core, 1.6 Ghz Intel Core i5. There was another variant (with model ID iMac16,2) that had a 4-core, 2.8 GHz Intel Core i5, and that scored about twice as well on multi-core benchmarks.

These iMacs have soldered-in RAM. There aren't even "sealed-in" RAM sockets. I'm guessing your iMac has 8 GB, since that's the minimum that MacTracker shows. These iMacs also have 1080p screens, not Retina 4K ones.

It does look like your iMac has at least 8 GB of RAM, has USB-A (USB 3.0) ports, and can run Monterey.