Yeah. Not to say that sticking an iMac motherboard into a dead LC is a bad idea though, even if it won't work with the original 12" monitor. One of the reasons I never finished my repacking job (other than the general disenchantment with how quirky and limited the iMac's hardware is) was I never really found a suitable case. (I went so far as gutting several oddball boxes, including an old ISDN router and a SUN external disk box, but the iMac's motherboard is such an awkward shape I could never fit it into something small enough to feel satisfying. An LC should work however.)
I still have in my junk box an LS-120 floppy drive scavenged from an old PC laptop that has a standard laptop CD-ROM IDE connector on it. It would be cute to put something like that in place of the LC's floppy. (A regular LS-120 or IDE ZIP would work as a slave on the same IDE connector as the hard drive, if you couldn't find a laptop one, and it is also possible to adapt the 50 pin cable that runs from the motherboard to the laptop CD-ROM adapter board into the standard 40 pin arrangement.)
The iMac motherboard *does* have solder pads for a real Mac floppy, but I seem to recall that if you apply the mandatory firmware update to run OS X on it it disables the controller, thus the need to go IDE.