Let me understand the Thunderbolt/USB 4 ports of the new iMac
There's actual more than one version of Thunderbolt - this seem to be the thing that confuses you regarding the connectors.
Thunderbolt (1st generation) which you have on your old iMac uses the same connector as mini-DisplayPort.
Thunderbolt 3, which is on the new iMac, uses the USB-C connector.
Then there's the matter of signalling protocols. The same signalling protocol can potentially be used on several different connectors. This seems to be the source of your confusion on the USB connectors.
Thunderbolt 3, USB 4 and USB 3 signals can run through the same type of connector - namely the USB-C connector.
However, it is also possible to run USB 3 over other connectors, such as the most common USB-A connector that you know from your old iMac.
You're right in that you cannot reuse your old display cables. These were actually not Thunderbolt to HDMI dongles, but rather mini-DisplayPort to HDMI. The new iMac uses a different connector, so they cannot be reused.
For the new iMac you need a USB-C to HDMI cable. You can also use an adapter/dongle and reuse an existing HDMI-to-HDMI cable for the long run of the cable.
The reason you do not get to connect two external, independent monitors is simply that the graphics processing unit in the iMac does not support more than 2 displays - the internal display and a single external monitor. It is not a limitation with the Thunderbolt/USB-C connector, nor is it a limitation with Thunderbolt signalling or anything like that. It is simply the GPU that does not support more displays.