It's very simple and you answered in your post. Get a mid model Mac mini with quad i7, buy matte screen (Dell Ultrasharp line, they make 24" monitor) and external superdrive for your DVD needs.
Compared to your current iMac, this little machine will be 10x faster. Plus you don't have to shell out so much money, harddrives and RAM can be upgraded later on. I'd get 8GB RAM (not from Apple but Newegg/OWC) right away however and consider buying additional SSD drive (again not from Apple) to replace your boot drive which you can use for data after upgrade. If you decide to do it, find local official repair center (not Apple store) and pay them to add SSD along with HDD to your Mac mini - you won't lose any warranty and professionals will do it for you.
If you do all these upgrades, you're looking for a price range approximately to base 21.5 iMac but with SSD drive, HDD for your data, optical drive and matte screen that you prefer.
Seems like a nobrainer to me.
EDIT: Why people assume that if you get a mini you HAVE to go with Thunderbolt display? You don't,there are many great displays out there with good specs and far better prices. Having TB functionality is nice but a bit pointless if you connect it to desktop machine, its main advantage is for connecting laptops.
As someone in this thread said: in two or three years you can still sell the mini for a very good price, maybe 50 or more percent. This will make your upgrades very cheap if you keep your display and peripherals. Instead of throwing money at expensive/difficult iMac upgrades, its really easy to just go to your local Apple store, grab the newest mini and bring it home. You then use Thunderbolt/LAN cable when setting up new machine to bring all your data to new Mini, done in 20 minutes, no hassle, no big money.
Yes Mac mini is not iMac but in current form, mini is just better value proposition, especially for people like you who are limited with glossy displays. Seriously, I wasn't too keen on new iMacs and after seeing european prices here I just went ahead and bought 2nd hand 2009 Mac Pro which is somewhere in the area if i7 mini performance. I don't mind, I prefer expandability right now and figured it will serve me very good in next 3 years. After that, I might go for mini too because I have display already, external sound card, etc. In 2015/16, if mini or sth like that is around, my MP will probably be something like G5 Powermacs today and I'll probably get mini then.
For all the people who complain about cable clutter there is such thing as cable management. If you get a good desk and put your computer somewhere else and set up cable holes, you'll have a clean desk, just a display cable and USB extender cable for thumb drives/card reader (that I keep in drawer). Mouse and keyboard are wireless. It's not an iMac but it's not disaster either.