That is the case if they were both at 4.0 or 3.5 ghz. But they aren't. This i7 processor is clocked 12.5% higher than the i5. It'll make a difference here. Well worth the $250 this time around.
Yes, that's a good point, I was thinking generally of the added benefit of hyperthreading and quadcore CPUs in games, which is minimal. Still don't think even the 0.5ghz difference will be very noticeable in games, when playing in high resolutions like 1440p with a mobile GPU. Possibly MMO games would benefit? I would still get the i7, because hyperthreading and higher clock speed is useful for other tasks - and why not get the best option when you are spending so much money on a shiny new iMac.
I chose an i7 CPU for my late 2012 iMac...
TIP: If the i7 CPU gets really hot when gaming, one can turn off turbo boost in Bootcamp (Power Options: CPU max speed 99%), which reduces the CPU temperature under load with about 10 C.