Getting OS X to recognise new Hard Disk Drive

My Situation:

I bought a used iMac last year (21.5", Late 2009; 16GB RAM; 3.06 Intel Core 2 Duo; 1TB HDD) and unfortunately recently the HDD began failing on me. I bought the OWC kit, which I think many of us are familiar with, and I managed to replace the 1TB HDD with a Toshiba 5TB HDD, I think properly, as I followed the instructions.

It did not boot up. I tried Recovery mode, I tried Option-D, starting from a bootable CD. I have my MacBook Air original SSD in an external enclosure, so finally, holding down T at startup, I was able to get that drive to boot up, after being on ice for more than a year. The installed 5TB doesn't show up in Disk Utility, and honestly I have no clue what step to next take

My Desired Position:

I wish to be able to format the new drive, which is physically installed in the iMac already, and then install OS X Yosemite, which I have on a thumb drive, thus allowing the 5TB HDD to be the Target Drive and the iMac run using that 5TB space, which is needed. The old MBA drive is only 128GB and I only have 3GB of space left on it.

Any help will be GREATLY appreciated.

Allerdyce Chambers...