Backblaze and similar services not necessary for a small hdd? Upload full disk dmg to cloud services easier? I understand the usefulness and convenience of a site like backblaze, but if I wanted an offline backup and my drive is under 100gb, would it make sense to just make an encrypted full disk dmg image of my main drive every once in a while and put on something like google drive which is a couple bucks a month for 100 gigs storage?
In case local backups aren't working (unlikely) I could use another computer to grab the file onto a thumb drive, and restore the image from disk utility recovery and it should work?
Could the usb with the dmg be ntfs or exfat coming from windows, or would it have to be hfs+ or apfs for disk util to see it?
Firstly, I think this depends on your personal price sensitivity, and factors like desire, or expectation for single file restoration, and tracking deleted files, as well as your internet connection. This is a fundamentally subjective and opinion based question.
Yes, you could image and save the whole image every month, but that comes with several drawbacks:

Backblaze is 'only' $4 more per month - this is dependent on your price sensitivity.
You have to remember to do it (although this could probably be automated, that's an investment of your time and energy). Something like CarbonCopyCloner will give you drive image back-ups.
You only get monthly point-in-time restoration. If your drive dies tomorrow (or you lose local back-ups), you're losing a month of data.
Backblaze gives you the ability to restore files from anywhere.
Backblaze gives you the ability to restore individual files quickly and easily
Uploading a whole drive every month could be taxing / time consuming on your internet connection.

To directly answer the questions in the title:

Necessary - this is entirely dependent on your risk tolerance and highly subjective. My personal opinion - backup everything that's personal to you (ie. can't be replaced), regardless of size.
Easier, no, Backblaze you set and forget and it uploads files every time they change. It's about as easy a solution as you can possibly get.

Backblaze is not your only option though:

iCloud will give you all your Documents off-site, and integrates into iOS and macOS so that it's as easy as Backblaze
Something like Arq allows you to backup to many different cloud providers - eg. AWS S3, and include Google Drive as a target option.