You are correct that the B2 will only read a hard disk if it is formatted as FAT32. The B2 can do the formatting for you. But don't reformat the disk that has you backup on it, as the formatting will erase all the data.
You can format a different disk and then copy all the files to the newly formatted disk and then Import the files onto the B2.
Probably an easier, and quicker way to get the files onto your B2 is via NAS (Network Attached Storage). After you have WiFi working on the B2, you can run the Start NAS command (Maintenance menu) and connect to the B2's HDD with your computer. There are instructions on the Brennan website.
One other thing to be aware of: the folder structure for your songs must be as Artist\Album\tracks. In other words, the tracks for each album must be in a folder named for that album, and then all the albums for an artist must be in a folder named for that artist. That is the format that the B2's Import command requires. However, if you have a backup of your songs from the JB7, those are in a different folder structure. For those files, use the Restore command so the B2 can read them and handle them appropriately. The Import/Export pair of commands are NOT interchangable with the Restore/Backup pair of commands.