Remember in my tome up above I said take it with a grain of salt, well I’m digging my way out slowly.
Spent hours trying to re-create your problem by installing HS on an external drive using every format possible using Disk Utility. No matter what I did, I never got the message you saw. Did learn a bit about Disk Utility.
When you format a drive for GUID, you automatically get an EFI partition on the drive you format.
Also, when I created HS on a GUID formatted drive, I get an Apple Boot Recovery drive on the external disk.
Screen Shot 2019-10-16 at 9.56.00 am
On the attached list, with HS running on the external drive, the external drive is disk2. Disk0 is HS on my internal drive, Disk1 is Catalina on my internal drive.
Suggest you start by entering “diskutil list” on a terminal window and see what you have.
Don’t know if you are trying to upgrade in place (take current system to upgraded version with all apps and data preserved) or trying to do a clean install. I don’t think you will be able to do the former easily, if at all. I would try the following if you have the resources;
Create a USB install of the Mac version you are trying to get to.
Shut down, disconnect your external drive, and set it aside. If you ever get the upgrade working, you can literally copy all your data and apps from it.
Boot to the USB install drive you created.
Using the MacOS Recovery Disk Utility that comes up, format a large enough, clean external drive or memory stick to APFS. You might have to format the top level disk (usually has manufacturers name as disk name) to GUID before it lets you select AFPS.
Try to install the MacOS on this clean disk.
If it works, you know you can do a clean install.
If it doesn’t work, ??? Think that means it wants something from the internal disk you do not have. Time to get a suction cup, and take apart the iMac.