Jerry Mcnabbin
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I know this is an old thread but I have to say that, despite the official limitations, you can indeed have up to 6GB of RAM AT LEAST in your iMac. Check out the post linked below.
https://forums.macrumors.com/showthread.php?t=607076
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You shouldn’t have to reformat the drive. Go to System Preferences > Time Machine and click the ‘On/Off’ swith in the bottom left corner to stop Time Machine backing up to that drive. You may also want to assign a different drive for Time Machine to back up to. You can then take your ‘Backups’ folder and move it anywhere you want for later use.