For god sake, why do you want to pay for i7? even upgrading ram to 8 gigs does not make sense with your usage...
I might be given $1300 to spend instead of $1000
If that is the case I might as well get my money's worth and upgrade the Ram and processor especially since I barely use half of my current 128GB SSD.
Why would I upgrade the HD if I dont use more than 50-60 GB at one time?
That leaves me with $90 upgrade for Ram, $140 for processor = $230 + $183 Apple Care would basically mean I would pay roughly $100 for a fully loaded MBA which would work in my benefit in case I decide to resell it in the future.
If I am only given $1000 of credit I plan on just upgrading the ram and adding Apple Care.