i3 or i5?

I have been using a 2007 white intel based iMac (right before the aluminum body). I have started having some serious graphics issues (flickering, screen freezes, left over graphics when moving a window etc.) Now im getting complete lock ups and screen freezes and pretty much have to power down the Mac and power back up in order to fix it. Some say my graphics card might be the issue and that it's not repairable or replaceable. Is this true?

If so, I am thinking about purchasing a new model 27inch i3 $1699.

I don't use this machine for gaming, heavy video editing or anything like that. I do a lot of web design and use combos of dreameaver, Photoshop, iWeb, iPhoto, iMovie. I also run browsers and iTunes during this use. I never had any issues before in 3 years so im assuming that the i3 model should be sufficient correct? What's the major difference between the i3 and i5? Would I even notice a difference if I'm not doing intensive 3D editing, or major video editing or gaming? I just want to be sure I'm getting the right set up. Thanks!