The performance of the bottom-end iMac with 8 GB and an HDD probably won’t be satisfactory, with either of those processors.
Computers are systems, and putting a fast component into a system with other and slower components won’t be beneficial to aggregate performance of the system.
The system speed is that of the slowest component. Not the fastest.
As stated above, 16 GB and a half-terabyte SSD will usually have a far greater effect on performance than the difference between i5 or an i7.
Not unless everything you’re doing is going to be processor-constrained. Which is rare.
I’m not a huge fan of using Fusion in this SSD era, either. That’s a small SSD trying to make a slow hard disk look less slow.
The bottom-end iMac is good for email, Photos, FaceTime, and light web browsing.
It’s also not particularly upgradable.