For the record, I was connecting to the same 2.0 port before my initial post.
FYI, my suggestion was meant as a "test," so if the shuffle works properly as the only connected device, that may mean there is a USB-related conflict between the shuffle and some other device you previously had connected. Or, all of the devices you previously had connected may exceed the total power available on the iMac's USB bus. You can try connecting a combination of devices to see if the shuffle stops connecting again. Or, if you had not shut down (completely powered off) the iMac (instead of just restarting it), the iMac's hardware may have needed a "reset" to get things working properly again.
I remain at 10.8.5 and do feel stuck there. At the very least, could I upgrade only as far as 10.9?
If your iMac is the "mid-2007" iMac with an aluminum body, and not the earlier white plastic body iMac from 2006 (that you purchased in 2007), it can actually run the latest OS X (10.10) "Yosemite"
http://www.everymac.com/mac-answers/os-x-yosemite-faq/os-x-yosemite-compatible-m acs-system-requirements.html
if it meets system requirements (such as RAM). It's remarkable how far back support for Yosemite goes for iMacs.
Since you use your iMac professionally, if the iMac and the software you run are working properly now and meets your needs, you may want to keep it "as is." What you can do as a test, to see if your iMac will work acceptably for your professional needs, is to upgrade your current system to Yosemite on an external drive. If you have an external drive that can be erased, you can use it. For this purpose, FireWire 800 would be best, but FireWire 400 or USB 2.0 also works.
(Be sure to separately back up your valuable user data before the test.)
The test is to first "clone" your current system to the external drive, then set System Preferences Startup Disk pane to start up from it. You may already use this method to back up, so I won't go into the details. But you can reply back with questions on how to clone your system. Be sure to name the clone something obvious, to avoid confusion. When started up from the cloned "test disk," your iMac should work just like it does when starting up from the internal drive (except it may "feel" a bit slower).
Then, while started up from the test disk, run App Store and download the Yosemite installer. Run the Yosemite installer and confirm you have select the test disk (NOT your internal drive) as the target. After installation and start up, run App Store and install any available Apple software updates. NOTE: In Yosemite, system software updates are installed using App Store (on the Updates tab).
Then, try doing the things you normally do on your iMac, to see if they work acceptably or not.
NOTE: Since you are making a jump from 10.8 to 10.10, a better test may be to do a "clean" install of Yosemite on a blank external drive, then reinstall your third-party software, then restore your user data. But that's likely to be a huge "pain" just to test if Yosemite is acceptable for your iMac and work flow.
In any case, your usual internal drive system is not affected.