Formatting an external hard drive for my iMac…

What is the best format to chose for an external hard drive?

Mac OS Extended (Journaled, Encrypted).

1) You should only format a hard drive in APFS if it is a SSD

2) A SSD drive only takes advantage of the APFS format

3) The current APFS format has issues doing Time Machine back ups… so stay with Mac OS Extended (Journaled)

Is this TRUE?

The macOS installer will convert only eligible Mac startup drives to APFS on its own. If it does not do that, don't do it, unless of course you are just morbidly curious. You can, for example, format your contemplated USB-C or TB hard disk drive to APFS, but you won't be able to use it as a Time Machine backup device, and it won't be readable to any operating system earlier than High Sierra. In other words it won't convey any advantage.

Time Machine works the same way it always has. Provided you have been using it according to Apple's documentation change nothing about it. To learn how to use Time Machine please read How to use Time Machine to back up or restore your Mac - Apple Support.

Mac OS Extended unless your external drive is an SSD then you can use APFS. It matters not to your operating system if your internal SSD is APFS and the external drive is Mac OS Extended.

Of course if you are also planning on using the drive attached to a Windows computer then format the drive ExFat so that both your Apple and Windows computer can read/write the drive.