Best possible processor for my iMac 2012 i5

Sadly, your between a rock and a hard place here ;-{

The newer 'Thin Series' iMac's don't have as aggressive cooling system as the 2011 and older systems. This is mostly due to the fact the CPU's Apple has been using in this newer series run cooler so they don't need as much cooling as the older CPU's. So as an example many of the older iMac's had three fans unlike yours which only has one. So what ever CPU you put in, needs not to exceed the TDP (W) of the highest the system was designed for.

• Your Systems CPU - Intel i5 - 3470S 3.60 GHz (65W) 4 cores/4 threads
• Best CPU offered '12 - Intel i7 - 3770 3.90 GHz (77W) 4 cores/8 threads

The only other CPU I know of that even fits within the FCLGA1155 socket is this one: Intel i7 - 4790 4.0 GHz (84 W) 4 cores/8 threads. But it won't work as it runs too hot and besides you're not getting that much of a bang from a performance perspective (review the performance numbers below). I should also point out I've never even tried doing it so it may not work as the system firmware may not allow it.

• Core i5 3470 3.60 GHz vs Core i7 3770 3.90 GHz
• Core i7 3770 3.90 GHz vs Core i7 4790 4.0 GHz

So where does this lead us to... Stick with the best this series offered (Intel i7 - 3770 3.90 GHz) if you are headstrong on upgrading the CPU. Be warned this is not a simple job! Given the risks here I would leave it be and either look at getting a newer model that has a Skylake CPU or hold out till the fall when a newer more powerful iMac series is expected.

Now lets talk about what you are doing as you may need to reconfigure your system to get more out of it. You talked about replacing the HD with a SSD can you tell us if your system came with a PCIe blade SSD? If it did you might not be leveraging it effectively here. So can you tell us what you have and how you've configured things.

Lastly, video encoding can be tricky! Depending on your apps you may need more clock than threads, I know that flies in the face of what most people tell you. We use Mac Pro's (yep the trash cans) we have two 6 core models and a 12 core model. Depending on what the App is and what we are converting the 12 core model may only be slightly faster than the 6 core models!

So you may want to review your apps & usage to see if adding cores or increasing speed will be better. Use Activity Monitor to map-out your processes to see what makes sense here.