iMac with a dead internal drive being used as a second monitor - booting and power efficiency I have an old 2012 iMac12,2 which had a fatal hard drive crash in early 2018 and has been running via booting from an external hard drive.

I have connected the 2012 Model to a new 2017 iMac18,3 via a Thunderbolt 3 (USB-C) to Thunderbolt 2 Adapter and a Thunderbolt 2 2M cable.

Using "Target Display Mode" (Pressing CommandF2 ) I am using the 2012 iMac as a second monitor for the 2018 iMac.

My question is 3-part: 


What is the best way to ensure that the 2012 iMac is running at lowest power usage and optimal efficiency while in Target Display Mode? I feel like the processor is working in the background, even though it is just being used as a monitor.
When it turns on, it automatically tries to boot off the dead internal hard drive, which makes the computer crash. To avoid this, I have to hold "Alt" when it boots to be able to select the External USB drive (Which I already have loaded and set up with OSX). Is there any way to get it to automatically select the external hard drive to boot from?
Once it is booted, is there a way to get it to automatically enter target display mode when it is booted?
What is the best way to ensure that the 2012 iMac is running at lowest
  power usage and optimal efficiency while in Target Display Mode?


Buy a monitor.

Yes, that's a little tounge-in-cheek, but to run Target Display Mode, you need boot macOS.  When you boot macOS, you're using the CPU and GPU and everything in between (you can use the volume up/down and screen brightness keys on the keyboard so you know Bluetooth is up and running).  


  When it turns on, it automatically tries to boot off the dead internal
  hard drive, which makes the computer crash.


You need to set the startup volume in System Preferences >> Startup Disk


  Once it is booted, is there a way to get it to automatically enter
  target display mode when it is booted?


No.  This is not what Target Display Mode was intended for.  It was intended to be a temporary display option.  If you need something to be a monitor every time you turn it on, buy an actual monitor.

Fix your iMac

It's not economical nor efficient to to use an entire computer as just a screen. An iMac, being an AiO, doesn't change the fact it's very little different than a Mac mini with an external monitor or even a desktop PC.  It wouldn't make sense to fire up an entire desktop setup just to use Target Mode (besides the fact that it already has an external monitor you can disconnect).

You have a failed hard drive in an iMac, which is not an uncommon problem.  Replacing it is very easy and much more economical because you would be getting the full use out of your iMac once again.