iMac 27in (2011) Hard Disk is damaged.

Based on the age of your iMac and the symptoms, it sounds like your internal drive (which I presume to be a mechanical drive from the clicking noises) has failed. It is most likely unrecoverable. This is not something you can repair or fix with a USB boot disk. And your newer Mac cannot be downgraded to High Sierra, it can only be downgraded at most to the OS that it come with when new. But that process is not simple and things like your email files and Photos Library etc. won't be readable in the older MacOS. I recommend that you not endanger your new Mac by trying to downgrade, it won't help your 2011 iMac even if you do, anyway.

Most people accept the demise of an older Mac like that when it happens. Assuming you have a reliable backup, you can move your files to another computer. If you still need to retrieve files from the failed drive, you can have it removed and try using a professional file recovery service. That will cost $hundreds at a minimum, possibly $thousands, and the recovery may or may not work; if it does work, it will likely recover only a fraction of the files, or possibly file fragments.

I looked on OWC MacSales and you can get a 1 TB replacement internal drive for your iMac for about $170 and it will cost you maybe another $100 to have an Apple Authorized Service Provider to install it. I would not spend that on such an old computer, other parts will no doubt fail in the near term future as well.

It sounds as if

• The internal hard drive is toast
• Even if you had, and booted from, an external startup drive, the Mac might work reliably until you had a repair shop replace the failed drive. (A failing/failed drive can throw errors even when not in active use.)

If you want to salvage your data, I believe you will have to do that from backups. (You did make backups BEFORE the hard disk died, right?). While a repair shop could remove the drive and put it in a wall-powered USB desktop drive enclosure, that wouldn't get you your data. The drive would continue to make the clicking noises in its new home, and act in a way that would make it difficult or impossible for your other computer to read it.

There are professional data recovery services who can try to recover partial data from failed hard drives, but their services cost $$$$$ (can run into many hundreds or thousands of dollars), and there is no guarantee of success.

+1 @steve626, I would dispose it off for the same reasons.