Get a 256GB SSD and then add on an External Data Drive. It's an iMac. It's not going to be going to Starbucks. External Storage is fine for it, and serves the same purpose while being completely reusable when you buy a new PC, etc. If you have a MacBook, you can just plug into that storage there, as well.
I don't think Fusion drives are worth it, esp. considering it's only in desktop Macs. If you need more storage, always go external; that's trivial to upgrade in both capacity and speed. Get the smaller SSD for the system performance, and get at least 16GB RAM, IMHO.
You probably don't want your code to be chained to the internal drive, anyways. A USB Western Digital MyPassport Drive is fine for Source Code and Software Development, IMO. They're dirt cheap. It's not like software development has the bandwidth requirements of video editing - which you would never do on a Fusion Drive due to the HDD being awful for it (you'd get external drives for that, probably SSDs).
A 256 GB SSD is enough for most people, IMO; even developers. I think you can save some money on that, unless you have massive Photos Libraries, iCloud Drive Data, Logic Pro Instruments, Sound Libraries, etc. that you want to keep completely on the local hard drive. At that point, I'd look into a 512GB or even 1TB SSD.
My new Windows Laptop has a similar setup, except all internal (NVMe + SATA3 Drive Bays). 250GB NVMe SSD for the OS and Applications, 1TB FireCuda SSHD for OneDrive, Content Libraries (A/V Editing, Graphics Design), Cache (Not for Performance-Sensitive Applications), Music, Videos, Games, Code, etc. Works wonderfully.
An iMac with an External Drive would be similar,. The only annoying thing on macOS is that it's not as easy to change where the iCloud Drive folder or user files reside. macOS (and Apple's software) wants to write everything to the system drive. On Windows, it's very easy to set this up (trivial settings in Settings App, or the OneDrive application).
This is a very easy with OneDrive or Creative Cloud (one obvious setting in the app settings, incl. on macOS from what I've seen), and for Windows user files (in Settings app). I don't think iCloud on macOS has any such setting. You only get the option for Optimized Storage.