You have me a bit confused here:
- You talk about replacing the SSD drive in this system (what came with it - PCIe blade drive)
- You talk about a Fusion Drive setup (where two drives are logically linked to look like one drive - system has both a HDD & SSD)
- Then talk about buying a SSD to put where the HD was (SATA connection).
Before you look at taking the blade SSD out have you taken your system into an Apple Store or Apple authorized service center to see if the SSD is covered under warranty? Apple has some extended warranty programs for defective components. You might want to check into that first (a lot cheaper solution).
If you have a Fusion Drive set then the issue here is more complex as you will need to break the fusion drive set and then diagnostically figure out if the HDD or the SSD is bad.
If you have a SSD only system then you'll need to take out the old SSD (PCIe blade) before you can add in a new one (you can't leave it in) and yes you could put in a new drive in the empty HDD bay putting in a SATA SSD. You'll need some additional parts to do that.
As to performance the PCIe blade SSD is over twice as fast as the best SATA connected SSD. So you will loose performance using a SATA Vs PCIe SSD.
As you still need to take the old drive out it may make sense just getting a replacement PCIe blade SSD.
But, there is a rub here! This SSD is a custom Apple part so you can't just throw in any drive! The good news is you should be able to find one using the information from the SSD drive and doing some searching. Paste an image of the label on the SSD here so we know which one you have. We might be able to aim you to a good replacement.
But lets first see if Apple will cover your SSD under warranty first! And please clarify what you have in your system.
Are you sure the drive is toast? If you have access to a second Mac or can create a bootable external drive you might try reformatting the drive.
In this case we can't use the recovery partition we need to boot from an external drive. Here's more on using a second Mac to fix your system: Use target disk mode to share files between two Mac computers here we're using the other Mac's Disk Utility to reformat the drive. Or... you can create an external bootable drive following this Apple T/N: How to set up and use an external Mac startup disk and lastly you could also setup an installer USB thumb drive: How to create a bootable macOS Sierra installer drive.
Here's what you'll need to do to remove the blade SSD and also gain access to the SATA header on the logic board: iMac Intel 27" Retina 5K Display SSD Replacement and here's the SATA cable: iMac Intel 27" Retina 5K Display SATA Cable Replacement
If you open the system be very careful taking the display off. It doesn't take much to damage it and that would be a very expensive Opps! Follow the IFIXIT guides to the letter and use the correct tools IFIXIT uses and get a couple of sets of tape sets as you know you'll end up needing to go back in a second time ;-}