2TB fusion hard drive dead...Replace with internal or ...?

Any external drive HDD or SSD that is setup as a bootable drive will allow you to at least test the system drive. Here is a bit weird as the HDD drive is the 2TB that is actually holding you files, the small Blade SSD hidden on the back side of the logic board is a Cache drive to the HHD hence where the Fusion Drive comes from.

So you'll need to create a bootable drive to start things off. Frankly I would just grab a 32GB thumb drive to use here. Do you have access to a second Mac as that makes things easier. From it reformat the thumb drive with a GUID Journaled file system so you have a clean drive. Then download to it from the Apple Store the same version your iMac is using. Copy the file to to the drive and then convert it into a bootable image following this guide Create a bootable installer for macOS

Then with it plugged in it should boot-up! Now go to the menu bar to open disk Utilities and run Disk first aid on the top level point did it run through cleanly?