Can Library folder on iMac be moved to iCloud Drive?
No. 

Firstly, relying on an internet connection to access preferences, caches, and other system/user 'working' files is likely to be problematic. As mentioned in the comments, iCloud is handled locally by a folder in the user Library, so having this itself in iCloud might be confusingly recursive.

It's worth checking whether all of that 96 Gb is necessary: it may include iPhone or iPad backups, which are frequent culprits for taking up space. Use an app like OmniDiskSweeper to search the library, sorted by size. That will show you what is taking the space, and you can then make a decision about whether it can be moved or deleted.