Andy is correct. All of the currently available versions of Premiere Pro require 2 GB or more VRAM in order to run properly. 4 GB or more VRAM is recommended.
I just looked up the specs of that 2012 21.5" iMac, And it is a lower-power i5 of the Ivy Bridge generation - the i5-3335S, with lower base and all-core Turbo clock speeds than other i5 CPUs of that vintage. At the time, i5's had only 4 cores and 4 threads (that is, no Hyperthreading).
Put them both together, and you will see why the CPU gets slammed hard with any kind of video editing. And still performs (literally) slower than a turtle in such a task and with such an application. What happens here is that the Mercury Playback Engine renderer will get permanently locked to the software-only mode (no GPU acceleration whatsoever), sending all rendering and video processing to the already underpowered CPU.