Time Machine and storage questions
Putting everything on the internal drive and using the external drive for Tim Machine will provide you with two copies of all of your data.  That way if either drive dies, you will not lose much data. 

Also, a best practice for Time Machine is to keep the drive connected and mounted at all times. This way a backup will be done every hour and will always be current.

My recommendation would be to consolidate everything on the internal drive and use an external drive for a time machine backup. You will probably be OK for quite a while, unless you start acquiring lots of music, movies, or TV shows. I believe that Apple recommends that the Time Machine drive be at least 1.5-2 times the size of the drives it is backing up. This may not be necessary in your case, your external 1TB drive should work fine. The OS will alert you when it has to start deleting older backups because the disk is getting too full.