How hot is too hot for internal components in general? I thought 130° F was within acceptable limits.

130ēC is fine but 160ēC at the air exhaust is bad news. This temp means that the boards and components are 10-20ēC hotter (than the measured air temp) at some point or other, and since heat rises it accumulates upwards of (above) the standard internal temperature sensors.

Most all of these common motherboard internal on-board (diode), on-chip or on-die (NTC/PTC) temperature sensors are not designed or intended for gauging temperatures accurately for vertically oriented operating measurement situations. This means that the temperature at the center or bottom edge pins of a sideways standing chip or pcboard is not the same as the temperature at the top of the component or top edge of the board when it's standing up on edge instead of laying horizontally.

While it takes around 330ēC to fully liquify modern SMT solders, solder is very soft and it tends to get mushy at much lower than full (liquifying) melting temperatures.

This means that surface mount components, which are where the heat comes from, can expand and push this now "mushy" solder away from their expanding pins/pads during extremely hot bouts. Once this solder layer is pushed away by the expanding component legs it cannot reflow back into good contact again, and at some point, cold solder heat-stress joints will eventually develop, where they were fine before.

Constantly sucking this excess heat out of the left-top air slot keeps the upper region thermal runaway at bay, by constantly removing heat from that obvious hot spot and staying ahead of the heat build up instead of waiting for a temperature rise and then trying to cool it off later.

The larger San Ace B76 suction/blower fan I recommended can be run at as little as 6 vdc in total silence and seems to work just as well at that voltage and there's no need to drill any holes nor do any damage to the iMac case. One or three little pieces of common boxing tape will effectively hold it there to the top slot behind the iMac where it is invisible from the front, and it's cooling effect will stop the tape from weakening or slipping off from this hot spot of the cabinet.

If you don't have or use A/C in the summer, you might prefer to use an adjustable "universal" AC adapter (3-13vdc) that you can turn up on hot days to run the fanat a variety of speeds, instead of using a fixed (6-9 vdc) voltage one. Be careful though, the (nominal) "10~12 vdc" San Ace B76 "stalls" at around 4 vdc, where it may continue to spin (very quietly if already running), yet won't start up on it's own. 5.5 vdc is the lowest typical starting/running power/voltage/rpm you can get away with on it.

If you cannot locate a San Ace B76, Nidac offers a smaller "Gamma 26" 12v model that's a bit lower in air flow, thus a bit noisier at lower power/rpms, but is a good substitute. Any small side suction dc blower fan exhausting upwards at the air slot is better than having none, though YMMV.