Both the CPU and GPU upgrades are no-brainers in this iMac. If you can’t afford both...
While you are right about the CPU (i7 all the way!), the
GPU is in fact "a brainer." We must use our brains to ponder it deeply, not merely because it costs more, but because of HEAT. Read previous posts and specs on that point. Note that the M290X has a higher clock speed too, which is most likely why it beat the M295X in at least one Bare Feats test.
I speak from experience having maxed out my late 2009 iMac i7 with the latest GPU. Guess what failed after two years of moderate to light use? Yes, the GPU. In fact, Apple swapped it out twice because the first swap didn't resolve the problem. Why did the GPU die? Heat. And I am not a gamer who would otherwise kill a GPU quickly.
I am still using that iMac to this day, typing this post on it, in fact. But I now use smcFanControl to keep the fans running faster than normal, so as to avoid another GPU death prior to my upgrading.
With all that said, I am still not sure if I want to upgrade my iMac YET. Why not? Because as much as that 5K screen is magnetically pulling my wallet out, I stuff that wallet back into its place in the knowledge that perhaps the biggest performance leap (and potentially a "heat-reducer" too) is
Broadwell. We'll probably have to wait until June 2015 for that, but for guys like me who don't buy a new Mac but once every 6 years or so, there is merit (and virtue) to patience.