Can't do clean install on iMac, hard drive not fully recognised

Yesterday afternoon I came to the iMac and discovered the screen had gone black except for a White Circle with a Cross through it.. Google search advised this was due to a system corruption with the OS not being able to recognise/map to the HD.

I followed the advice of rebooting using the "Command+R" key hold down, checking the main drive using the Disk Utility, however before I could proceed to reinstalling operating system the HD was not being properly recognised.. from here my memory is a little fuzzy on what options I chose, but I basically decided to erase the HD and then do a full reinstall. But, looking at it closer the storage space of the main drive was much smaller, only 121GB - despite the actual original Apple SSD being 1TB.

I've not been able to reformat / rediscover the full 1TB drive, I've tried booting from the Recovery Disk by holding down Option key at boot-up, etc. I get the request to connect to local Wifi network (despite already being connected by cable) and I get the "Revolving Earth" etc.

I've attached several screen shots for reference.

Looking at various other threads with somewhat similar problems, it looks like I need to create a boot-up USB Disk, and I've got some loose instructions / too many tabs open to count...

And I have an up to date Time Machine Back Up on a remote hard-drive, and the computer was running the latest macOS High Sierra, installed just a few days ago.

I'm up to my eye balls in other work, lack of sleep, etc. and getting frustrated with various other mounting challenges. If anyone can give me specific instructions here it would be greatly appreciated, thank you!

I had just 3hrs sleep, but was on the phone with Apple technical support yesterday, initially regarding an iPhone 6 battery replacement, but decided to ask them about this problem..

So they forwarded my call to the Mac service department and was transferred to their most senior and experienced tech manager. I ended up being advised by him for more than an hour and he walked me through various tests using the many HD Boot Utility options and boot-up key configurations, including ones I'd never read about on my many hours of web searching, while using my iPhone screen share with him. As you had suspected Dan, he concluded in the end that it is a problem with the HD and that it will need looking at by an Apple service centre. So I've made an appointment with them in a few days time.

I've looked more closely at the Mac from the rear and can visibly see quite a build up of dust from the various ports and air vents... I'm now suspecting that having the machine turned on for the past 3 + years has caused a severe build up of dust that has led to HD failure. Maybe it just needs a brush down and vacuum, but likely a new hard drive. I'll update for anyone interested in a few days time. Thanks again Dan for your input.