Sorry to put a damper on your thinking, but if you had done Physics at school (Sorry, that is a very stupid old fashioned thing to suggest and probably "out-of-date") then you would know the magnetic field has to be perpendicular to the electric field. I.E. the magnetic field in-line with the AXIS of the windings of your toroid. I'll crawl back into my little hole and keep quite again...
So without a back-iron, the magnetic lines of force go through the coils and extend into the aluminum, where they are constantly changing because the dynamo magnets are turning.
the back-iron, the magnetic lines of force from a magnet pole goes through a coil or two, hits the back-iron, turns
(because they're following a path of less resistance), and come out of the back-iron again opposite a magnet pole of the opposite polarity. By and large, they're diverted from the aluminum frame, and they're even concentrated a bit in the coils.
The EMF induced by the magnetic field is along the direction of the wires, which is, indeed, at right angles to the magnetic field as it passes by the coils
, even if it does change direction sharply when it gets to the back-iron
It's the same principle of a transformer core -- the magnetic field lines follow the iron, because magnetic permeability is more or less the opposite of magnetic resistance.
I haven't done the experiment, but find a pair of nice strong magnets of a human scale -- something that can pick up a few nails. Dig up a steel plate, about 1/8" thick, not much bigger than the magnets side by side. Now put the two magnets on the plate, both with the same pole on the plate. You ought
to be able to pick up some nails. Now put the two magnets on the plate, with opposite poles. You'll pick up far fewer nails, because the plate is shunting the magnetic field, in exactly the way that the iron wire I proposed would do.