According to iFixIt (https://www.ifixit.com/Guide/iMac+Intel+21.5-Inch+EMC+2544+Hard+Drive+Replacement/16729), it doesn't look difficult to change, so the only cost would be basic tools and a new 2.5" hard drive (or SSD):
Not an immediate fan of the rear of the laptop. Maybe I have to see it in person first. Also not a fan of the rear USB ports. To its credit, at least it has more than one USB-C port, unlike the overpriced 12" MacBook. But having them out the back? I'd rather have 1 port on the side than 3-4 on...
Photos aren't handled like music. They aren't just spread across many folders then put together properly by the OS. Go to "open device to view files" to basically view /var/mobile/Media/DCIM/.
If the OP restored from scratch, there will only be one folder.
Define "normal methods," particularly on the PC/Windows side of things. When viewing through Explorer, it just pulls folders out of DCIM, so you would see all of the extra ones.
Restoring will bring things back down to a single folder.