higher processor speed means smoother operating system and faster use of apps.
more power means less computation and rendering time.
It is obvious that if you use a phone to surf the internet, for social media and to take pictures, you don't see the difference but you don't even see it using an iphone 7 instead of an iphone 12.
if you also use the phone to work (photo editing and video montages) you can see the difference immediately.
For example I use the photoshop and pinnacle apps.
then there are also those who use the 12 for facebook and safari but obviously it is not the "pro" use that takes advantage of the performance of a phone.
For these use you can take an old iphone, not the last model.