Is the 5400RPM Hard Drive Really Slow?

thunderbolt is only an interface if you get an external harddisk box with a 5400RPM or 7200RPM the fact that they connect over thunderbold does not speed anything up

All things being equal, a 7200rpm drive will outperform a 5400rpm drive. But all things are never equal. And it's not just about the rpm's of the drive. So what's different? For starters that new 21.5" iMac has a 6.0 Gbps SATA-3 HD interface whereas your 2006 era iMac has a much slower 1.5 Gbps SATA-1 HD interface. I doubt there is anything wrong with your current 7200 rpm drive. You should look at the detailed specs. If it's a SATA-2 or SATA-3 hard drive, it will still be throttled to SATA-1 speeds because that's what's in your 2006 era Mac.

I wouldn't be surprised to find a new, nearly empty 5400rpm SATA-3 HD performing about the same or perhaps even slightly better than a 7200rpm SATA-1 HD that is 60% or more full (as yours is). Technically there may be additional influencers (like differences in the architecture of the two Macs and even the HDs themselves) but these are the biggies. Yes, the amount of data on your drive will eventually affect performance especially once you hit 50% of capacity. To do a fair comparison you would have to test your drive against a drive of exactly the same capacity and exactly the same amount of data on it as that new out-of-the-box 21.5" iMac. Something like 20GB.

And then there's the fusion drive, which combines an SSD with a hard drive, so depending on use, you may see disk i/o in the neighborhood of RAM access speeds there.