You can indeed connect an external monitor to the iMac. I have a late 2015 model with 16 GB of ram, and I have an external monitor attached to it. Even when I had * GB of ram, I didn't have issues. I'm using a 24-inch monitor, but I think the system could easily drive a larger one. I don't have enough room on the desk for anything much larger than that.
You should be able to have one resolution level set on one monitor and a different resolution set for the iMac. My second monitor is an LG Ultrawide, and it works well, but I wish I had gotten one with the same aspect ratio as my iMac. I personally find the difference in aspect ratio a little distracting.