Can not create a bootable drive / partition on iMac This is a very frustration issue and I am banging my head against the wall.

I have an old iMac Intel 21.5" EMC 2389 iMac I salvaged from my parents and the drive failed.  I added a new 1TB WD drive to replace the old 500GB WD drive:

https://www.ifixit.com/Guide/iMac+Intel+21.5-Inch+EMC+2389+Hard+Drive+Replacement/6284

Tried to do a clean install of OS X and it kept going into an installer loop after the first install reboot (would go back to the start and ask you what drive to install to etc.).

I finally figured out that the newly formatted internal hard drive is not bootable despite me partitioning and formatting it with the GUID Partition Map.  If I select the drive in Disk Utility and click the info button the drive is listed as bootable = no.

So the installer plugs away, installs the first wave of files then reboots expecting it to boot from the target but it can't so it goes back to the installer USB stick again.
Why are you installing from  usb?

I recently replaced a hard drive in a 2008 mbp with samsung 850 evo. Using Target Disk mode, connecting mpb to my imac via 1394b/tb, i used the online restore to write the install image to the mbp after using the same connection with DiskUtil to partition journaled mac format.

Despite what the interweb blathering to the contrary claims this works as designed.