That can make a big difference, especially on an older Mac. Having bumped many system's RAM from 4GB to 8GB myself, I can say you're definitely not imagining that improvement.
As far as being the recommended amount of RAM, 16GB is the norm today. For that iMac when it was released, 8GB was becoming the norm. That Mac should actually work with 16GB, though whether you actually want to bump it that high depends on whether you want to spend the money on it, as well as considering the usage scenario for that machine. 8GB clearly helped, but if it won't be used for any workloads that are TOO demanding, 16GB may not be worth it. It's really more up to you and your family member that will be using the system to decide.