Many thanks to all who gave me some answers.. I did not answer many of them - since there was many.
There was also really many stirring web articles, vblogs telling different things.. if iMac was internally like crow's nest, web is another. Apples decision to cut OS support and change to ARM did make reading support articles even more difficult.
But you gave me result I have now. iMac is running High Sierra with half of RAM until I will find more.
Since I could not do anything with my iPhone and had only one broken Mac, making bootable media seem impossible and there was information that corresponding Mac needs to be compatible with needed bootable media. I got Macbook Air, but it did not seem to make any sense to downgrade that just for for making one bootable media. I am happy that Catalina was compatible enough - at first I didn't have courage to start installing old operating system inside Catalina, but it was needed.
Ten years ago, before I changed to Risk management, I maintained several flight safety equipments for 20 years, so this was my nice summer project and I did learn a lot.
Hopefully I find 1333 MHz DDR3 SO-DIMM (PC3-10600) answer - is there something special. Ones I watched, they sell them double..