Need to replace the hard drive

First check your serial number here iMac 1TB Seagate Hard Drive Replacement Program. If it is one of the systems that has a bad Seagate HD bring it into the Apple Store to have them replace it under the exchange program (free).

I would still bring your system in as the HD's in these systems have a three year warranty so it's possible its still covered (hardware not labor). Your last option is replacing the HD your self if it is truly failing.

I would make a backup ASAP and prep up a bootable USB thumb drive with your current OS. I would also copy over to the thumb drive a copy of your OS installer and any downloaded app installers while your at it.

With the USB drive as the bootable drive, run Disk Utility on your internal drive to check it out more thoroughly. Run the repair disk and permissions each twice to see if the errors have been repaired. If not you may need to scratch the drive and reformat it. I would get Disk Genius or other third party app that can do this more effectively.