I've blown one PAV assembly in a G3/600 from excessive heat. The machine still worked, but it took a while to build up the required charge for a successful illumination of the tube and the horizontal sweep. Even once it was running, it would dim and brighten, flicker, etc. (That board has since been replaced) It's of my opinion that the convection cooling is adequate but only under strict scenarios. Correct elevation, lack of obstructions and other room temperature and environmental factors.
Upgrading the cooling system inside an iMac G3 would only prolong the life of the machine and further harden it against the many variables in airflow. I pondered installing a fan in my iMac G3, but it hasn't been booted up in a while and now the lower case has cracks, so it seems less and less likely that I should sink any major funds into it. Probably just fix the lower case and sell it.