Is there a general method for transforming equations with powers of ... 0.5 into polynomials?
Such "algebraization" is always possible for equations with rational powers, using polynomial resultants. In the given case for example, substituting $\,\sqrt{x}=y\,$ then eliminating $\,y\,$ between the resulting equation and $\,y^2-x=0\,$ gives resultant[ y^4 + y^3 - y^2 + y + 2, y^2 - x, y ] $\,=x^4 - 3 x^3 + 3 x^2 - 5 x + 4\,$. This is the same polynomial obtained via multiplication by the "conjugate" as suggested in the original post or, alternatively, obtained by isolating the square roots on one side then squaring the equation.
The technique works for arbitrary rational exponents, not just square roots. Consider for example the more complicated equation:
$$
x+\sqrt{x}+\sqrt[3]{x}-1=0 \tag{1}
$$
The substitution $\,\sqrt[6]{x}=y\,$ rewrites the equation as $\,y^6+y^3+y^2-1=0\,$, then eliminating $\,y\,$ between the latter and $\,y^6-x=0\,$ via resultant[ y^6 + y^3 + y^2 - 1, y^6 - x, y ] gives a polynomial with integer coefficients which has all solutions of $(1)$ as roots:
$$
x^6 - 9 x^5 + 32 x^4 - 45 x^3 + 31 x^2 - 11 x + 1 \tag{2}
$$
It should be noted that in all cases the resulting equation may (and in general will) have extraneous roots introduced along the way, which are not roots of the original equation. For example, $(2)$ has the root $x=1$ which does not satisfy equation $(1)$.